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ficult to find anywhere else. Here we go! tion for quality, transparency, communication, and cus-
tomer service.
Interactive Streaming (Spotify, Apple Music, etc.)
generates three different (tiny) revenue streams: - In the past, the Harry Fox Agency and Music Reports
used to be involved with these streaming audio me-
1) Mechanical Royalties: the streaming service had chanical royalties, but this aspect of their work is
to “reproduce” the musical work’s recording for now completely handled by The MLC. Publishers/
the user who chose it, so the traditional idea of copyright holders register works, not recordings,
“mechanical” royalties applies. with The MLC. The MLC has various ways of
matching registered works with recordings; publish-
2) Performance Royalties (more specifically, “Pub- ers can also help match up recordings with their
lic Performance Royalties”): since the user doesn’t registered works.
fully own the track, it’s treated as a public “perfor-
mance.” - Distributor/aggregator services like CD Baby (or
TuneCore, Distrokid, etc.) only collect mechanical
3) Wholesale Proceeds: because an interactive royalties from streaming audio if you sign up for
stream is also considered a “reproduction and dis- their additional “Pro Publishing” representation
tribution” of the sound recording, much like a “re- (which would only work if you don’t have a sepa-
tail sale,” this is a revenue share (similar to what a rate publisher; otherwise that publisher would reg-
retailer would typically pay to a wholesaler/man- ister your works with The MLC, collect these me-
ufacturer of a product) paid out to the album label chanicals, and split them with you). CD Baby Pro
(or for independent artists, the album producer/ Publishing takes a 15% cut. If you are an indepen-
owner), not the music publisher or composer. dent/self publisher, signing up with the MLC as a
publisher and registering your own works allows
Mechanical Royalties for interactive streaming you to collect 100% of your MLC royalties directly.
are paid by the Digital Service Providers (DSPs, e.g.,
Apple Music, Spotify, etc.), not by the album produc- - Technically, The MLC also offers a blanket license to
er/label, the way they are with physical albums. As of permanent download DSPs (e.g., iTunes, etc.), but
2021, these royalties are paid by the DSPs to the new- very few DSPs utilize this approach. Most still pay
ly established Mechanical Licensing Collective mechanical royalties to the record label/album
(“The MLC”), who then distributes them to publish- owner/producer, who is responsible for securing a
ers, who then typically split them 50/50 with compos- mechanical license from the publisher.
ers. (The MLC also distributes directly to self-published
composers who register as a publisher.) Publishers or - The MLC only collects and disburses mechanical roy-
self-publishers need to register their published works alties; it does not play any role in any other revenue
with the MLC in order to collect their mechanical roy- streams, even though their diagram at www.themlc.
alties. com/digital-music-royalties-landscape helpfully
The MLC, a non-profit central clearinghouse for shows other revenue streams.
all digital streaming compulsory mechanical royalties
in the United States, was created by the Music Mod- Performance Royalties for interactive streaming
ernization Act passed by United States Congress in are reported by the Digital Service Providers (DSPs)
2018 as a way to centralize and simplify these inter- to your Performing Rights Organization (PRO) (e.g.
active streaming mechanical royalties. Since it began ASCAP, BMI, etc), who then calculates the payment
operations in 2021, the MLC has already paid out over amount and pays out that revenue, splitting it 50/50 be-
one billion dollars to copyright holders (as of February tween publisher and writer(s), the same way they pay
2023), and has quickly developed an excellent reputa- live-performance royalties).

CHORAL JOURNAL March/April 2023 Volume 63 Number 7 39