Sphinx:
I sit above the portal to the Treasury of Tunes. Reply, wanderer, or your royalties tumble into the Black Field.
Riddle:
What creature is born by statute, nurses on “admin,” and fattens on time?
Within the morning it crawls on 4: Unmatched, Unclaimed, Unnoticed, Invested.
At midday it walks on two: KPIs and PR—boasting “industry-leading matching” whereas clutching different individuals’s money.
At evening it hobbles on three: Counsel, Consultants, and Compliance, leaning exhausting whereas asking for one more time period of rule.
It speaks of “effectivity,” however its pockets jingle with songwriter pennies;
it swears it’s a steward, but performs portfolio supervisor;
it guarantees readability, however information footnotes about what can’t be proven.
Title it, and identify the remedy that lets vacationers move.
H/T to Sophocles, Oedipus Rex
I’m definitely not a fan of actually any of the businesses that comprise the Digital Licensee Coordinator’s membership (DLC). In actual fact, you most likely couldn’t discover a extra full rogues’ gallery of most of my least favourite Huge Tech firms—however once they’re proper, they’re proper.
“Redesignation” is the Copyright Workplace’s statutory 5-year evaluate of whether or not the corporate that runs the Mechanical Licensing Collective nonetheless meets the Music Modernization Act’s standards to run the §115 blanket license (17 USC §115(d)(3)(B)(ii)). The Workplace can renew—or substitute—the designation if the Workplace decides a alternative is important to guard songwriters and licensees. The Workplace’s view on the designation is remaining given its statutory oversight position, or no less than as remaining as some other rule making.
In fact changing the corporate that runs the MLC can be fairly disruptive to all the MLC experiment. For my part and the view of many others together with the Digital Licensee Coordinator, The Workplace may additionally situation any renewal (or “redesignation”) of the MLC on enhancing its lackluster efficiency and postpone the renewal till the MLC improves, if ever. That “center floor” resolution to only firing the corporate is simply frequent sense. When you can fireplace somebody, you too can give them efficiency metrics to reside as much as with a view to keep away from firing them.
The DLC’s most up-to-date “ex parte” letter (see beneath) solutions years of songwriter and writer requests that the MLC has brushed apart—higher matching, transparency, governance, timeliness, metrics, and accountability. Crucially, it confronts repeated, credible criticisms that the MLC’s funding of unmatched royalties is extremely vires (outdoors the regulation): The MMA authorizes assortment and distribution, not portfolio-management schemes of an “unmatched” hedge fund that’s seemingly in extra of $1.2 billion of the songwriters’ cash. That’s larger than most regional banks which have an entire lot extra regulation than the MLC.
The Digital Licensee Coordinator urges the Copyright Workplace to take that center path by conditionally redesignating the MLC and pair that step with stronger oversight. This method displays frequent sense and Congressional intent: if redesignation weren’t meant for use as leverage to course right, Congress wouldn’t have created a periodic redesignation course of in any respect—it could have handed the MLC lifetime appointments. They didn’t, as one would anticipate. The MLC isn’t the Harry Fox Company, in any case. One really is the federal government; the opposite simply thinks they’re. Conditional redesignation is due to this fact the suitable software to make sure the MLC performs its uniquely highly effective statutory position responsibly, transparently, and within the pursuits of all rightsholders.
It’s additionally one other technique to reply the riddle: If issues are going swimmingly, why does the unequalled fund continue to grow?
The DLC stresses how the MLC’s powers—gathering and distributing over a billion {dollars} yearly, implementing the blanket license, and imposing prices on licensees—demand strong governance and accountability distinct from what’s anticipated of the DLC itself. With that asymmetry in thoughts, the Workplace ought to focus the redesignation determination on whether or not the MLC wants extra safeguards to satisfy Congress’s imaginative and prescient for §115. Debating whether or not these safeguards arrive as express situations on redesignation or as stand-alone laws is a matter of type, not substance; both pathway legitimately implements the MMA and squarely matches inside the Workplace’s authority.
To “tee up” the report, the DLC attaches a useful and consultant Exhibit cataloging songwriter, unbiased writer, and creator-group critiques throughout six operational themes the place the MLC has fallen brief: unmatched “black field” royalties; information/matching issues; governance and conflicts; transparency and accountability gaps; operational and technical delays; and the funding of unclaimed royalties. That remark helps conditional redesignation backed by measurable efficiency metrics(e.g., black-box discount targets, matching accuracy, timeliness, dispute decision KPIs) or by new, focused laws—and, if wanted, each.
Lastly, rapid triage ought to start with abandoning the contested funding coverage for unclaimed royalties—criticized by many stakeholders as extremely vires (which by the way in which, eliminates any indemnity safety within the MMA)—and liquidating the portfolio so money flows to the individuals Congress supposed to learn: songwriters. Conditional redesignation offers the Workplace the oversight deal with to make these corrections now, align incentives going ahead, and make sure the MLC’s stewardship is proscribed to the size of its statutory energy.
It additionally should be mentioned that if the MLC doesn’t clear up its act, what comes subsequent might not be so genteel. Conditional redesignation might look awfully good within the rear view mirror.
