On Tuesday, September 5th, the U.S. Copyright Office (USCO) issued a significant ruling that clarifies that streaming platforms must pay late fees when they fail to meet their royalty payment obligations to the Mechanical Licensing Collective (The MLC) under the Music Modernization Act moving forward.

 

However, it's essential to note that this ruling has specific limitations. It does not include Phonorecords III rates from 2018 to 2022. Songwriters have waited over five years for an estimated $700-$800 million in back mechanical royalties from a delay in finalizing the rates.

 

The USCO states, "Having carefully considered the statutory text, legislative history, and public comments, the Office concludes that the statute's due date provisions are unambiguous. The statute's reference to "due date for payment" clearly refers to the date on which monthly royalty payments are required to be delivered to the MLC, i.e., no later than forty-five days after the end of the monthly reporting period." They said, "Further, the Office agrees with commenters that late fees do not apply to adjustments resulting from the change in rates and terms following the Copyright Royalty Judges' Phonorecords III Remand determination."

 

National Music Publishers' Association (NMPA) President and CEO David Israelite says in Billboard, "This is a major victory for music creators who have waited far too long to be made whole from the appeal, which significantly delayed their compensation."