The music industry is currently embroiled in a heated debate over the renewal of the compulsory license for mechanical licensing. This contentious issue has divided stakeholders and sparked discussions about the future of songwriters and their ability to profit from their creative works. In this blog post, we will delve into the intricacies of the compulsory license debate, examining its history, implications, and potential benefits of ending this long-standing practice.

To understand the current situation, it’s crucial to differentiate between the mechanical licensing collective (MLC) and the private company, The MLC, Inc., designated by Congress to administer the compulsory license under Section 115. While the MLC carries out the function of the mechanical licensing collective, it is important to note that it does not “own” the data it collects. Congress reviews the performance of The MLC, Inc. every five years to determine whether it should continue its operations.

However, renewing The MLC, Inc.’s designation is not solely about its existence but also about the larger question of whether the compulsory license itself should be re-upped. The compulsory license, established over a century ago, was initially intended to level the playing field between music users and copyright owners. At that time, concerns were raised about potential monopolistic behavior by copyright owners, leading to the creation of a compulsory license that allowed anyone to reproduce and distribute musical works without the consent of the copyright owner, as long as they adhered to certain provisions and paid royalties.

Fast forward to today, and the landscape has drastically changed. The biggest users of the compulsory license are now the tech giants and streaming platforms, which dominate the music industry. Paradoxically, the compulsory license, initially designed to protect music users, has become a hindrance for songwriters, limiting their ability to collectively bargain and earn fair compensation. Despite decades of government-mandated price fixing, songwriters have found themselves at the bottom of the compensation ladder.

Critics argue that the compulsory license has outlived its purpose and is in dire need of reform. They advocate for a free market approach that allows songwriters to negotiate better deals and regain control over their work. Merck Mercuriadis, a prominent figure in the industry, believes that it’s time to improve the songwriters’ share of streaming revenue and ultimately transition to a free market system.

While abandoning the compulsory license altogether may not be a viable option, there are alternative paths forward. One suggestion is to create a more flexible collective licensing system based on Section 115, which would cover all mechanical uses by default unless individual music publishers choose to opt-out. This approach would provide songwriters with the freedom to negotiate and make informed decisions about their music.

Of course, any transition requires careful consideration. Grandfathering services that were established before or after the elimination of the compulsory license could be a necessary step to avoid disruption. However, it is crucial for Congress to establish a firm expiration date for the compulsory license, bringing transparency and certainty to the process.

One key aspect that cannot be overlooked is the importance of involving songwriters in this decision-making process. Historically, their voices have been marginalized, and their compensation has been subject to external forces. It’s time to change that. Congress should seek input from songwriters and allow them to vote on matters that directly impact their livelihoods.

The closest songwriters have come to have a seat at the table was during the Music Modernization Act, which led to the establishment of The MLC, Inc. While it was a step in the right direction, many argue that true collective bargaining power is needed. By ending the compulsory license and transitioning to a free market system, songwriters would finally have the opportunity to negotiate fair deals that reflect the value of their creations.

In conclusion, the compulsory license renewal debate in the music industry has reignited discussions about the role and impact of this long-standing practice. As the landscape continues to evolve, it is essential to critically evaluate the compulsory license, considering the interests of all stakeholders involved. The time may have come for a change, one that empowers songwriters to collectively bargain, participate in a free market, and receive fair compensation for their invaluable contributions to the music industry.

The NTW3RK Collective is a dynamic community comprising professionals from the music, film, and technology sectors. With a deep understanding of these industries, the collective offers invaluable research and development resources to inform and empower creatives. Their mission is to equip artists with the knowledge and tools necessary to enhance their creative processes, safeguard their work, and optimize their monetization strategies. Through their expertise and collaborative efforts, the NTW3RK Collective is dedicated to supporting artists in their journey to create, protect, and monetize their art with confidence and success.


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