Unmatched Royalties Are a Data Problem, Not a Mystery

Every year, digital streaming platforms generate billions of royalty transactions. The overwhelming majority are matched to their rightful owners and paid. But a meaningful subset of those royalties, particularly mechanical royalties owed to songwriters and publishers, cannot be paid because the usage cannot be connected to a properly registered work.

These are unmatched royalties. They are not missing. They are not gone. They sit at The Mechanical Licensing Collective (The MLC) waiting for a data connection that has not yet been made. Understanding how this system works, and what independent artists can do about it, starts with understanding what The MLC does and why the matching problem exists.

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#### What The MLC Does

The MLC administers blanket mechanical licenses for eligible streaming and download services in the United States (The MLC). Since its blanket license went into effect on January 1, 2021, digital service providers (DSPs), platforms like Spotify, Apple Music, Amazon Music, and others, send usage data and royalty payments to The MLC monthly. The MLC then matches those streams and downloads to registered songs, and pays the appropriate rights holders.

Mechanical royalties are the royalties owed to songwriters and music publishers for the reproduction of a song, see mechanical royalties and publishing for definitions. When you stream a song on Spotify, the songwriter is owed a mechanical royalty for that stream. The MLC is the organization responsible for collecting and distributing those payments in the US under the Music Modernization Act.

The system works at scale. DSPs report hundreds of millions of usage events. The MLC has distributed the significant majority of those royalties successfully. But the system depends on data: song registrations, ISRC codes, and rights ownership records that connect a usage event to a specific registered work with identified owners.

When that data is incomplete or missing, the royalty goes unmatched.

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#### Why Royalties Go Unmatched

Royalties go unmatched for reasons that are nearly all data-related:

• A songwriter or publisher has not registered the work with The MLC, so there is no record to match against.
• A work is registered but the ISRC (International Standard Recording Code) associated with the usage does not connect to the right record.
• A co-written work has one owner's information registered but not another's, leaving their share unmatched.
• A recording is distributed under a different name or metadata than what is registered with The MLC.

None of these situations indicate the royalty has been lost. They indicate the database does not yet have enough information to complete the match. This is why calling unmatched royalties a mystery is misleading. There is no mystery about what needs to happen, the data needs to be correct and complete.

For independent artists who handle their own publishing and distribution, the registration gap is the most common issue. If a song is distributed through a digital distributor but the songwriter's publishing rights are not registered with The MLC, those mechanical royalties cannot reach the songwriter.

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#### What Happens to Unmatched Royalties

Unmatched or unclaimed royalties from usage occurring on or after January 1, 2021, are held by The MLC for a minimum of three years (The MLC blog). During that holding period, The MLC continues working to match the usage to the right owners. Any interest that accrues during the holding period is passed along to the rightsholders when a match is eventually made.

After The MLC exhausts its matching efforts, any royalties that remain unmatched or unclaimed are distributed to music publishers and self-administered songwriters using a market-share or activity-based formula. That distribution is structured as an industry-wide allocation, not a refund to the individual artist whose streams generated the royalty.

The three-year minimum holding period creates a window. Independent artists who register their works and properly claim their recordings can recover royalties that would otherwise move toward market-share distribution. But the clock is running from the date of the original usage event, not from whenever the artist becomes aware of the issue.

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#### Historical Unmatched Royalties: A Different Category

There is a separate and now largely resolved category: historical unmatched royalties covering streaming activity from 2007 to 2020, before The MLC's blanket license existed.

Twenty-one DSPs transferred their historical unmatched royalties to The MLC by February 15, 2021, to receive a limitation on liability for prior copyright infringement under the Music Modernization Act. The total transferred was approximately $397 million after adjustments (The MLC historical royalties page). That figure includes usage from three rate periods: Phonorecords 1 (2007 to 2012), Phonorecords 2 (2013 to 2017), and Phonorecords 3 (2018 to 2020).

The MLC has been distributing those historical royalties as matching work proceeds. Distributions for Phonorecords 1 and 2 began in 2022. Phonorecords 3 distributions, which were delayed by legal appeals over rate-setting, began in April 2024 after rates were finalized in August 2023. The MLC has noted that more than 40 percent of blanket royalties not yet distributed relate to shares of registered works that have not yet been claimed by the appropriate rightsholders.

Historical royalties are searchable through The MLC's Matching Tool for members. Unclaimed shares can be located through The MLC's Claiming Tool.

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#### What DURP Is and Why It Exists

The MLC developed the Distributor Unmatched Recordings Portal, DURP, to address the data gap at its source (The MLC DURP page). DURP gives independent music distributors and aggregators direct access to data on millions of recordings that are accruing unclaimed digital audio mechanical royalties for DIY artists.

The logic is practical: distributors have metadata on the recordings they have delivered to DSPs. If that metadata can be matched to The MLC's unmatched usage data, the path to payment becomes clearer. DURP exists to facilitate that connection at scale, with input developed in partnership with some of the largest independent music distributors.

For independent artists, DURP is not a tool you access directly, it is accessed by your distributor. But if your distributor participates in DURP and has submitted your recordings, The MLC may have royalties for you. The MLC's Artist Lookup page is the place to check whether The MLC has royalties associated with your name.

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#### What Independent Artists Should Do

The clearest action is registration. If you are a songwriter who handles your own publishing, register directly with The MLC at themlc.com. If you release music through a distributor, verify that your mechanical rights are properly registered and that your distributor is submitting accurate metadata.

The harder problem is the split situation. If you co-wrote a song, all parties to the writing split need their ownership registered. A missing co-writer means their share sits unmatched. For guidance on how splits work at the point of creation, see Splits Done Right: The Conversation Every Co-Write Needs Before the Record Button. For context on how ASCAP and BMI fit into this ecosystem versus what The MLC handles, see ASCAP and BMI: What They Actually Do.

The mechanical royalty system is not broken. It is incomplete in specific and correctable ways. The data problem has a data solution, registration, accurate metadata, and timely claiming.