@Jim_Jordan @RepDarrellIssa: Is Your MLC Stonewalling on unpaid $500 million Black Box to Songwriters?

So it’s not just me. According to the latest Digital Music News investigation, senior executives at the MLC are dodging simple questions about the investment portfolio of over $500 million that the MLC has amassed from other people’s money in the black box they are currently holding (possibly at City National Bank in Nashville).

Dylan Smith’s latest reporting states:

The music industry can count the MLC as another major contributor to the multi-billion-dollar ‘black box’ of unpaid royalties. Earlier this week, an anonymous source reached out to Digital Music News with word of a massive tranche of owed-but-unpaid mechanical royalty compensation, as well as adjacent concerns about the operations of the Mechanical Licensing Collective.

You don’t really need an anonymous source to know some of these things–it’s right in your face in their public statements, tax returns and annual report, plus the Copyright Office’s rather MIA response to questions from then-Chairman Leahy during the Copyright Office oversight hearing. But at least the Copyright Office tried to answer the questions.

When asked about the MLC’s current black box royalty figure, the organization’s chief marketing officer Ellen Truley (whose 2021 base salary cracked a staggering $341,000, also according to IRS tax disclosures) declined to share any figures but offered “to get back to you with information on Monday.” 

Multiple follow-up messages exchanged between DMN and Truley prompted the latter to offer “to chat with you to get you the most accurate info,” but failed to produce a direct answer to the seemingly straightforward question.

And while many assumed that the MLC – the sizable budget of which previously elicited criticism – had chipped away at the figure during the remainder of 2021, the mentioned tax filings show that the pile of black box royalties was even larger when the year concluded. 

The DMN post also notes that there’s internal shenanigans regarding the oldest desktop audit technique in the book: compare your sound recording sales to your publishing royalties and see if the units match up. This is so unremarkable that it’s remarkable that MLC doesn’t run these tests as a matter of course, but apparently not:

DMN was provided with a breakdown of an artist and songwriter’s streaming royalty statements from DistroKid and the MLC. With each of the music professional’s works organized by title and ISRC, the resource appears to show significant discrepancies between the number of recording streams identified by DistroKid and the number of composition streams identified by the MLC, which should in theory match.

One work garnered north of 1.15 million Spotify plays in the DistroKid report but failed to register any MLC streams at all during the same period, for instance, potentially signaling a major underpayment. Interestingly, there are comparatively few differences in stream counts on platforms such as Apple Music and Amazon Music, the document shows, and the size of each difference seems to be far smaller.

Oh well. Maybe Chairman Jim Jordan or Rep. Darrell Issa at House Judiciary will take an interest in how the MLC can sit on $500 million for two years while establishing an “investment policy” that allowed them to make over $2 million in trading profit when their operating costs are covered by the services that pay for the privilege of using the government’s compulsory license and they evidently don’t share those trading profits with the songwriters.

It’s not fair for the Copyright Office to have to defend the MLC that routinely ignores Copyright Office guidance. The easiest way for Congress to find out what’s going on at its MLC quango run by inferior officers of the United States per President Trump’s signing statement for the Music Modernization Act is to ask the MLC to come to Congress and explain themselves directly to lawmakers. Maybe they’ll return that phone call. Dunno, could be good.

Read the post on Digital Music News

The MLC Still Can’t Show the Money

[Editor Charlie sez: Everyone paying attention knew from the time they stopped calling it SIRA II and started calling it Music Modernization Act (a title that conveys exactly zero information about the subject of the bill) that the legislation was designed to lock in the Harry Fox Agency’s death grip on songwriters. And therefore also knew for years that the MLC would be run by the majors and would be serviced by the same HFA database that resulted in many lawsuits against Spotify for being unlicensed. So if the HFA is the best of breed and the gold standard and all the other euphemisms for mediocrity that MLC threw out there, they should have been standing ready to match the $474 million in unmatched that got paid after the 1/1/21 “license availability date” because of their super duper song matching capability. Not only have HFA apparently not matched the lions share of the $474 million, what the MLC has announced as matched is for services that HFA did no work for that we know of. And remember, this is not a cost issue because the services are paying for the cost.

“Give them a chance” you will be told by the smart people, particularly by the non-oversight of the Copyright Office. They had their chance. The game was rigged to begin with–and overseen by the head of lobbying for Spotify. If they’d spent less time rigging the game and less time giving each other awards and listening to the sound of one back slapping, we would not have this problem.

But don’t worry, no one will get fired because you can’t be late if there are no deadlines. And now…back to sleep.]