On January 1,2021 the newly-passed Music Modernization Act (MMA) took effect. The law was initially launched to take into account new technology and address how it affects the sale of music creations. However, text in the law leaves room for potential corruption in the way music creators may (or may not) be paid.

Specifically, an arm of the MMA -- the Mechanical Royalty Collective (MLC) -- is responsible for paying music creators mechanical royalties they are due. Among other things, mechanicals apply to many types of streaming music (the most-used method of listening to music these days).

One of the potential problem with the MLC paying out mechanical royalties lays in the database they will use to make payouts. The database with which the MLC will begin is one belonging to the Harry Fox Agency (HFA).

The database is known to be incomplete in the sense that many creators move without the database being updated. Also heirs of creators who have died often don't know how to keep information updated. The result has been that royalties due to creators/heirs often aren't paid out. Instead, the royalties are held in accounts until the correct people can be found and paid.

This is where another potential problem arises with the MLC. Rather than being required to make honest efforts to find these creators/heirs, the MLC will be allowed (after a time period) to take the royalties owed to unfound creators/heirs and split them up, on a market-share basis, to the big-money music interests that influenced the law to start. These are groups like the major streaming companies, major publishers and others. Essentially, the MLC can allow already-wealthy, big-monied music interests to profit from money owed to smaller creators and heirs simply by not seeking them out. Currently there is more than a billion dollars at stake that hasn't been paid out, so the stakes are high.

The Songwriters Guild of America urges all creators to educate themselves about the MLC. If music creators and their heirs hope to be paid what they're owed they must:

The SGA will also work to keep creators updated on news of the MLC and other laws that affect how (and if) music creators and their heirs are paid. If you'd like to get our newsletter with updates about the MLC and other important news for creators, sign up below.