What the MLC's First Full Year Taught Independent Artists About Streaming Royalties

A New Institution With Billions of Dollars at Stake

The Mechanical Licensing Collective was created by law, not by market forces.

The Music Modernization Act of 2018 established the MLC as the centralized organization responsible for licensing digital audio mechanical rights and distributing the resulting royalties to songwriters and publishers. Before the MLC opened for operations in January 2021, mechanical royalties for digital streaming were collected and distributed through a patchwork of publisher agreements, direct licenses, and a system that left hundreds of millions of dollars in unmatched or unclaimed status for years.

The MLC's first full operational year was 2021. Its second, 2022, produced the first comprehensive data set that independent artists and the broader music publishing community could use to understand how the new system actually performed. That data arrived in the MLC's 2022 Annual Royalty Recap, and what it revealed was both encouraging and sobering.

What the MLC Distributed in 2022

In 2022, the MLC directly distributed more than $532.3 million in mechanical royalties to songwriters and publishers. Combined with $48 million distributed by digital service providers through voluntary licenses (arrangements that predated the MLC's blanket license system), total royalties distributed for 2022 reached roughly $580.3 million, according to the MLC's 2022 Annual Royalty Recap.

The distribution operated across 12 monthly cycles, with a match rate (the percentage of streamed works that the MLC successfully linked to a registered musical work) averaging nearly 85 percent initially and rising to more than 89 percent by the time of the recap's publication. For January 2022 usage specifically, the match rate had risen above 90 percent, demonstrating meaningful system improvement over time.

Those numbers represent significant operational progress for an organization less than two years old. The MLC handles a scale of data that is difficult to overstate: every digital stream of every song on every licensed platform generates a mechanical royalty event, and those events run into the billions annually across the entire streaming catalog.

The Black Box: Where the Real Story Is

The encouraging distribution figures exist alongside a number that tells a different, more urgent story.

When the MLC was established, it received a transfer of $426.9 million in historical unmatched royalties (the so-called black box) accrued between 2007 and 2020 across 21 digital service providers, per the MLC's 2022 Annual Royalty Recap. These were royalties that had been collected by DSPs but could not be paid out because no one could establish which musical work they belonged to.

Of that $426.9 million:

• Approximately $373.6 million related to the Phono 3 period (approximately 2018 to 2020), which was still awaiting a final rate determination from the Copyright Royalty Board before processing could begin.
• Approximately $53.4 million related to the pre-2018 periods (2007 to 2017). First-pass processing on this amount was completed by end of 2022, with approximately $11.4 million (21.6 percent of the total) having been paid out by the time of the recap.

The statutory framework gives the MLC at least three years to match unmatched royalties to registered works before the remaining amounts are redistributed to publishers based on market share. In practice, that means royalties that cannot be matched to a registered work within the statutory window are redistributed proportionally to major publishers, a mechanism that critics have characterized as systematically advantaging publishers with large registered catalogs at the expense of smaller rights holders whose works simply weren't registered.

This is not a hypothetical. It is a structural feature of the system. Independent artists whose works are not registered in the MLC's database before the matching window closes are effectively funding royalty distributions to other, better-registered publishers.

What Matching Actually Requires

The MLC matches a streaming royalty event to a musical work using metadata, primarily ISRC codes (assigned by distributors when a recording is released), ISWC codes (assigned by PROs when a composition is registered), and songwriter and publisher information embedded in the release.

The match fails when:

• The musical work is not registered in the MLC database
• The metadata embedded in the release is incomplete or inaccurate
• The songwriter or publisher information doesn't match a registered member

Each of these failures is preventable. Independent artists who distribute through aggregators need to ensure that ISRC codes are assigned, that their works are registered with their PRO (which generates ISWC codes and feeds that data to the MLC), and that songwriter and split information is accurate in the MLC's member portal.

The MLC provides a Public Search Tool for anyone to search songs by writer or publisher name and see claimed and unclaimed shares. It also provides a Matching Tool for members to identify unmatched uses of their registered works and a Claiming Tool for members to claim shares of works that are registered but incompletely claimed.

Using these tools is not technically complicated. Not using them is expensive.

Why 2022 Was the Critical Window

The early years of the MLC's operation represented the highest-concentration period for unclaimed royalties in the system's history. The $426.9 million in historical black-box royalties, combined with ongoing current-year unmatched amounts, meant that 2022 was a year in which active engagement with the MLC could recover meaningful money for independent artists who had released music since digital streaming began in earnest.

Artists who had been releasing music since 2020 or 2021, as many independent artists working with production teams like Mollohan Production Inc. had begun doing, may have had accrued mechanical royalties sitting unmatched in the MLC's system simply because the MLC was new, registration processes were unfamiliar, and the administrative steps weren't yet part of standard release practice.

That gap between release and registration is still a common problem. Joshua Mollohan has worked to make royalty setup (PRO registration, MLC enrollment, ISRC documentation) a standard part of project preparation rather than an afterthought. The money at stake isn't hypothetical; it's sitting in the system waiting for a match.

The 2023 Update: Over $2 Billion Distributed in Three Years

The MLC's longer-term record improved substantially. By 2023, the organization had distributed more than $2 billion in streaming royalties across its first three years of operation, with ongoing improvements in match rates and the completion of additional rounds of historical royalty processing, per MLC blog reporting.

The ongoing lesson (through 2022, 2023, and forward) is consistent: the MLC distributes royalties to those who are registered and can be found. It does not chase down artists who haven't enrolled. The system is passive on the distribution end but only pays out to those who have done the active work of registering.