Mechanical Licensing Collective: What It Is and How to Get Paid

Key Takeaways

• The Mechanical Licensing Collective (MLC) is a non-profit organisation that distributes digital mechanical royalties to songwriters and publishers in the UK.

• To receive payments, you must register for free as a rights holder and submit your song data accurately to The MLC.

• The MLC only collects mechanical royalties from digital audio streaming/downloads, not performance royalties, so also join a Performing Rights Organisation (PRO) for full coverage.

• Royalties are paid quarterly, with 100% of collected royalties distributed to registered members without deductions.

• Keeping your song metadata accurate and updated with The MLC is essential for timely and correct royalty payments.

Understanding the Purpose of the Mechanical Licensing Collective

Established under the Music Modernisation Act of 2018, the Mechanical Licensing Collective (MLC) serves as a centralised, non-profit entity tasked with administering and distributing digital audio mechanical royalties to songwriters, composers, and publishers.

The MLC’s primary function is to issue and oversee blanket mechanical licences granted to Digital Service Providers (DSPs) such as Spotify and Apple Music. By aggregating mechanical royalties generated from digital reproductions, the MLC guarantees accurate, transparent, and efficient royalty collection and distribution.

Importantly, the organisation restricts its activities to digital audio mechanical royalties, excluding physical sales and performance royalties. Membership is free for rightsholders, with the MLC remitting 100% of collected royalties without deducting administrative fees, thereby streamlining equitable compensation within the digital music ecosystem.

Key Differences Between Mechanical and Performance Royalties

Royalties form the backbone of music industry compensation, yet mechanical and performance royalties are fundamentally distinct in their origins and administration.

Mechanical royalties arise from the reproduction of musical works, encompassing both physical formats (CDs, vinyl) and digital formats (streams, downloads) via Digital Service Providers. The Mechanical Licensing Collective (MLC) is responsible for collecting and distributing mechanical royalties from eligible DSPs, typically paying songwriters and publishers directly.

In contrast, performance royalties are generated solely from public performances, such as radio airplay or live concerts, and are managed by performing rights organisations (PROs) like ASCAP, BMI, and SESAC.

To maximise earnings, songwriters must register their works with the MLC for mechanical royalties and a PRO for performance royalties, as each follows distinct collection processes and timelines.

How the MLC Was Established and Funded

The Mechanical Licensing Collective was established pursuant to the Music Modernisation Act of 2018, which mandated a centralised system to administer digital mechanical royalties.

As a non-profit entity designated by the UK Copyright Office, the MLC operates under strict regulatory oversight to guarantee transparency and accountability.

Its funding is sourced directly from digital service providers through a structured fee model, eliminating financial burdens for songwriters and publishers.

Music Modernisation Act Origins

Amid rapid shifts in the music industry prompted by digital streaming, the Mechanical Licensing Collective (MLC) emerged as a direct outcome of the Music Modernization Act (MMA) of 2018—a legislative overhaul designed to reconcile outdated copyright statutes with the realities of digital music consumption.

The MMA addressed the complexities of administering digital mechanical royalties by mandating a central agency, the MLC, to oversee the issuance of blanket licences for digital audio services. Designated by the UK Copyright Office, the MLC began formal operations on 1 January 2021, with foundational support from major stakeholder organisations.

Its establishment was financially underwritten by Digital Service Providers, ensuring that the costs of administering digital mechanical royalties did not burden songwriters or publishers, marking a pivotal shift in industry compensation practices.

Nonprofit Structure and Oversight

While responding to longstanding challenges in royalty administration, the Mechanical Licensing Collective (MLC) was established under the Music Modernisation Act of 2018 as a non-profit entity specifically tasked with overseeing digital mechanical licensing.

This non-profit organisation was designed to centralise and streamline royalty collection and distribution for music publishing stakeholders, ensuring that songwriters and publishers receive equitable royalties in the digital era.

Governed by a board composed of music publishing executives and songwriters, the MLC guarantees rightsholder representation and transparency in its decision-making processes.

Unlike Performance Rights Organisations, the MLC’s exclusive mandate is the administration of mechanical royalties, not performance royalties.

Notably, its operational funding and substantial start-up costs were provided by Digital Service Providers, removing financial burdens from creators and reinforcing a rightsholder-focused governance structure.

Digital Services Funding Model

Distinct from traditional nonprofit funding models, the Mechanical Licensing Collective operates under a unique financial structure mandated by the Music Modernisation Act of 2018, which requires that Digital Service Providers (DSPs) such as Spotify, Apple Music, and Amazon Music bear full responsibility for the organisation’s startup and ongoing operational costs. The MLC’s inception was funded entirely by DSPs, with an initial outlay of $33.5 million for startup expenses and a first-year operational budget of $28.5 million, subject to annual reassessment. This model guarantees that songwriters and publishers incur no administrative deductions from mechanical royalties. Blanket licences, issued to DSPs by January 2021, enable efficient royalty collection and distribution. The table below summarises the MLC funding structure:

Types of Royalties Collected by the MLC

A significant portion of royalties managed by the Mechanical Licensing Collective (MLC) consists exclusively of digital audio mechanical royalties generated from interactive streaming services such as Spotify, Apple Music, and Amazon Music within the United States.

These mechanical royalties are paid whenever a musical work is digitally reproduced or streamed through licensed Digital Service Providers (DSPs). The MLC’s collection mandate is strictly limited to U.S.-generated mechanical royalties from interactive streaming and digital downloads, thereby excluding performance royalties, physical sales royalties, and lyric-generated royalties.

Additionally, the MLC does not handle royalties from non-interactive streaming platforms or social media outlets. All distributed streaming royalties are allocated directly to songwriters, composers, lyricists, and music publishers, ensuring that rights holders are compensated accurately from eligible DSPs within the U.S. market.

Who Should Join the MLC

Songwriters, composers, lyricists, and music publishers seeking to collect digital mechanical royalties from U.S. interactive streaming platforms are primary candidates for membership in the Mechanical Licensing Collective (MLC).

Individuals who own their publishing rights must join the MLC directly to guarantee they receive mechanical royalties, while those with representation may rely on their publishing administrator to manage the process.

The MLC provides access to blanket licences, streamlining royalty collection from major digital service providers such as Spotify and Apple Music. Membership is free, assuring that 100% of royalties are paid out with no administrative deductions.

Songwriters must register only original compositions, as covers and public rights works are ineligible.

The MLC is indispensable for creators aiming for transparent, direct compensation from digital music platforms.

Eligibility Requirements for Membership

Eligibility for membership in the Mechanical Licensing Collective (MLC) is determined by legal ownership and control of musical copyrights. To qualify for MLC membership, a rightsholder must either be a self-administered songwriter or a music publisher who possesses the rights to original musical works.

Eligibility excludes those whose works are solely covers or derived from public domain materials, as these do not generate qualifying mechanical royalties. Membership is free and specifically targets parties seeking to collect UK digital audio mechanical royalties from eligible Digital Service Providers (DSPs).

Songwriters affiliated with publishing companies generally have their royalties administered by their publisher and do not need to join the MLC independently. In contrast, self-administered songwriters are entitled to direct membership to guarantee accurate royalty collection.

Registration Process for Songwriters and Publishers

Although the MLC offers an accessible route to digital mechanical royalty collection, the registration process requires precise adherence to technical requirements and accurate data entry. Songwriters and publishers must register directly with The MLC if they control the copyright to their musical works, unless a publishing administrator (e.g., Songtrust) already manages their repertoire. This process ensures that mechanical royalties from eligible Digital Service Providers are accurately distributed. Registration is free, but all works must be registered with thorough metadata to avoid payment delays. The MLC’s data-driven infrastructure emphasises the necessity for exact information. Members can utilise the Public Search feature to verify their works’ registration status.

How to Ensure Your Songs Are Properly Registered

While the Mechanical Licensing Collective streamlines royalty collection, precise registration of musical works remains essential for accurate payment distribution.

To guarantee songs are properly registered with the MLC, copyright holders must confirm ownership and submit only original works, as covers and public domain tracks are ineligible.

Regularly reviewing and updating registered song information in the MLC database helps prevent royalty delays due to incomplete or erroneous data.

Songwriters affiliated with a publishing administrator or mechanical rights organisation, such as Songtrust, benefit from third-party management of the registration process, reducing administrative burdens.

Utilising the MLC’s Public Search tool enables creators to verify that their works are correctly registered, mitigating mismatches.

Diligent adherence to these protocols guarantees efficient and reliable mechanical royalties collection for all registered songs. Additionally, understanding mechanical royalties is crucial for maximising earned income from registered compositions.

The Importance of Accurate Data for Royalty Collection

Precise registration of musical works and thorough verification of song metadata are fundamental to accurate royalty allocation by The MLC.

Any discrepancies or omissions in this data can result in payment delays or unclaimed royalties for rightsholders.

Registering Works Correctly

Every successful royalty collection effort relies fundamentally on the accurate and complete registration of musical works within The Mechanical Licensing Collective’s (The MLC) database.

Registering works with precise, up-to-date data is imperative for ensuring that rightsholders receive digital mechanical royalties efficiently and without error. As a data-driven organisation, the MLC depends on accurate data to match royalties to their rightful owners.

Failure to maintain rigorously correct registrations can result in unmatched royalties, delayed payments, and lost revenue. The MLC provides resources to guide members through effective data registration procedures, reinforcing the importance of diligence.

• Missed or incorrect registrations risk significant lost royalties

• Delays in payment can disrupt creative livelihoods

• Accurate data prevents funds from languishing as unmatched royalties

• Every detail matters in ensuring financial recognition for creators

Verifying Song Metadata

A significant portion of effective royalty collection depends on the integrity of song metadata registered with The Mechanical Licensing Collective (The MLC).

Accurate metadata registration is essential, as it enables The MLC to reliably match musical works with their respective rights holders, ensuring proper disbursement of royalties. The MLC’s operations are fundamentally data-driven, requiring members to maintain up-to-date and precise information for each registered composition.

Inaccuracies or omissions in metadata can result in unmatched royalties—an issue that has historically led to substantial financial losses. By utilising the MLC’s Public Search feature, members can verify their works are correctly catalogued and associated with the right parties.

Detailed guidance for maintaining accurate data is readily available on The MLC’s website, supporting optimal royalty collection.

Preventing Payment Delays

Maintaining accurate and thorough data within The Mechanical Licensing Collective’s registry not only supports proper song attribution but also serves as a key factor in preventing delays in royalty payments.

The MLC’s data-driven infrastructure relies on precise and up-to-date information for registered works to guarantee that mechanical royalties are distributed efficiently. Inaccurate or incomplete data can result in unmatched royalties, as reflected by the $424 million historically collected by The MLC.

Regularly reviewing and updating metadata, utilising the Public Search feature, and verifying all information is essential for all rights holders. The consequences of neglecting data accuracy can be significant:

• Lost or delayed mechanical royalties

• Increased unmatched royalties pool

• Frustration for songwriters and publishers

• Erosion of trust in the royalty collection process

Payment Structure and Timeline for Royalties

Although the process is highly structured, the Mechanical Licensing Collective (MLC) guarantees that 100% of collected mechanical royalties are distributed directly to rights holders, with no commission deducted. The payment structure is transparent: royalties collected each quarter are distributed two quarters later. For instance, royalties that the MLC collects in Q1 (January–March) are distributed in Q3 (July–September), ensuring systematic and predictable payments. This approach maximises trust and clarity in royalty distribution, as detailed in the table below.

The MLC also manages historical and unmatched royalties, ensuring thorough payment distribution.

Common Mistakes to Avoid With Mechanical Royalties

Accurate royalty payments depend not only on the MLC’s structured distribution timeline but also on the proactive management of administrative tasks by rights holders. A critical misstep is failing to register songs with both the MLC and a Performance Rights Organisation, as each serves distinct royalty types—mechanical and performance, respectively.

Neglecting to register songs individually, regardless of rights ownership, directly results in uncollected mechanical royalties since the MLC only pays for registered works. Disputes often arise from not negotiating royalty shares with co-writers prior to release, complicating future payments.

Moreover, insufficient understanding of publishing contracts or overlooking each contributor’s role can erode earnings. Avoid these costly errors:

• Forgetting to register songs with the MLC and PRO

• Not confirming royalty shares before release

• Overlooking individual song registration

• Entering contracts without full comprehension

The Role of Partners Like TuneCore, Songtrust, and CDB Boost

Intermediary partners such as TuneCore, Songtrust, and CDB Boost streamline the complex process of mechanical royalty registration and collection for songwriters and publishers.

These entities act as administrative liaisons, guaranteeing accurate and timely registration of musical works with the Mechanical Licensing Collective (MLC). TuneCore Publishing submits works to the MLC on behalf of its clients, eliminating the need for direct songwriter involvement in the registration process.

Songtrust manages global royalty collection, registering compositions with the MLC and over 215 international societies to maximise revenue streams.

CDB Boost, via CD Baby, provides an opt-in feature that enables seamless mechanical royalty collection for new digital audio releases.

Additional Resources for Maximising Your Royalties

Beyond the administrative support provided by partners such as TuneCore, Songtrust, and CDB Boost, songwriters and publishers can further enhance royalty collection by utilising the extensive educational and technological resources offered by the Mechanical Licensing Collective (MLC).

Mastery of the MLC platform maximises mechanical royalties by ensuring data accuracy and transparency for all registered works. The MLC’s suite of tools empowers songwriters to safeguard earnings and minimise lost revenue due to misregistration or missing information. Proactive engagement with these resources is fundamental for efficient royalty distribution and long-term financial sustainability.

• Access educational webinars to understand the nuances of royalties

• Use the MLC’s public search feature to verify registered works

• Consult the MLC website for detailed registration guidance

• Regularly update registered works to prevent royalty delays

Frequently Asked Questions

What Is the Mechanical Licensing Collective?

The Mechanical Licensing Collective is a nonprofit organisation central to music licensing basics, overseeing mechanical rights explained, streamlining the royalty collection process, enhancing songwriter benefits, and providing industry impact analysis by transparently distributing digital mechanical royalties to rights holders in the United States.

Who Gets Paid for Mechanical Royalties?

Mechanical royalties are distributed to songwriters, composers, lyricists, and music publishers in accordance with copyright laws and industry standards. Royalty distribution ensures songwriter earnings from music publishing whenever their works are reproduced, aligning with regulated compensation frameworks.

How to Get Money From MLC?

To receive money from the MLC, rights holders must complete song registration steps with accurate metadata, utilise copyright administration tips, and understand mechanical royalties explained, ensuring proper royalty collection methods and seamless payment distribution process through quarterly disbursements.

How Does a Mechanical Licence Work?

A mechanical licence grants mechanical rights, permitting reproduction and digital distribution of copyrighted music. The licensing process overview involves acquiring permission, registering song ownership details, and utilising royalty collection methods to guarantee rights holders receive compensation for uses across platforms.

Conclusion

The Mechanical Licensing Collective (MLC) streamlines mechanical royalty collection and distribution for music creators, ensuring compliance with statutory regulations and proper compensation for rights holders. By understanding the distinctions between mechanical and performance royalties, registering accurately, and utilising partnerships with administrators like TuneCore and Songtrust, songwriters and publishers can optimise their income streams. Vigilance in data management and proactive engagement with MLC resources are essential for maximising royalty payments and safeguarding long-term copyright interests in the evolving digital music environment.