April 20, 2026

How the Music Modernization Act Changed Royalties

Before October 2018, the music industry operated under a patchwork of licensing laws that had not kept pace with the shift to digital streaming. Songwriters and producers routinely watched their work generate millions of plays while royalty payments either arrived late, arrived short, or never arrived at all. The gap between how music was consumed and how creators were compensated had grown into a crisis affecting everyone from legacy artists with classic catalogs to independent songwriters uploading their first tracks.

The Music Modernization Act, signed into law on October 11, 2018, represented the most significant update to United States copyright law in decades. The law bundled three separate pieces of legislation into one package: the Musical Works Modernization Act, the CLASSICS Act, and the AMP Act. Each addressed a distinct failure in the old system, and together they restructured the financial architecture connecting streaming platforms to the people who actually create music.

Legislation	What It Fixed	Who It Helps
Musical Works Modernization Act	Created a blanket mechanical license and established the MLC to centralize royalty collection from streaming	Songwriters and music publishers
CLASSICS Act	Extended federal digital performance rights to pre-1972 sound recordings for the first time	Legacy artists, estates, and labels with older catalogs
AMP Act	Allowed producers and engineers to receive SoundExchange royalties directly via letter of direction	Producers, mixers, and engineers on commercially released recordings

How the Music Modernization Act Rewrote the Rules for Streaming Royalties

The Pre-2018 Licensing Gap That Left Songwriters Unpaid

Under the old system, every streaming service was individually responsible for identifying the correct rights holders for every song it made available. That process required matching a sound recording to its underlying musical composition, locating the publisher or songwriter who controlled the mechanical rights, and then obtaining a license before or shortly after the song was streamed. In practice, this was nearly impossible at scale. Platforms were ingesting tens of thousands of new tracks per day, and the metadata attached to those tracks was often incomplete or incorrect. Missing ISWC codes, misspelled songwriter names, or absent publisher information meant that a large volume of mechanical royalties simply could not be matched to anyone.

The result was a pool of unclaimed royalties that platforms set aside when they could not identify the correct payee. Under prior rules, those funds were eventually redistributed, often to major publishers based on market share rather than to the actual songwriters who earned them. Independent and self-published songwriters were disproportionately harmed. The issue was not that platforms were simply pocketing the money; the reality was a system so fragmented that even willing payers could not always find the right recipients.

Music Modernization Act Impact on Streaming Services

The law fundamentally altered the obligations of streaming platforms by creating a blanket mechanical license. Instead of requiring each service to negotiate and track millions of individual licenses, the Music Modernization Act established a single compulsory blanket license covering all interactive streaming and digital download activity for musical compositions. Streaming services now pay into one centralized entity rather than attempting to clear rights song by song.

Services like Spotify, Amazon Music, and YouTube Music must now pay a set royalty rate determined by the Copyright Royalty Board, routed through the designated collective rather than through ad hoc agreements. The law also removed the previous safe harbor provision that had shielded services from copyright infringement lawsuits when they failed to locate rights holders. For creators, the practical effect is a more reliable pipeline between the moment a listener presses play and the moment a royalty payment reaches the correct account.

The Mechanical Licensing Collective Payment Process

How the MLC Centralizes Mechanical Royalty Collection

The Mechanical Licensing Collective, commonly known as the MLC, is the nonprofit entity Congress designated to administer the blanket mechanical license. It began full operations on January 1, 2021, and serves as the central hub through which all interactive streaming mechanical royalties for musical works flow in the United States. The MLC maintains a public database of musical works ownership information and is responsible for matching sound recordings to their underlying compositions so that royalties reach the correct songwriters and publishers.

Here is how the payment process works in practice:

A streaming service reports usage data and pays mechanical royalties to the MLC on a monthly basis.
The MLC matches each streamed recording to its registered composition using metadata such as ISRC codes, ISWC codes, song titles, and writer names.
Matched royalties are distributed to the registered rights holders, typically within a few months of the reporting period.
Unmatched royalties are held for a defined period while the MLC attempts to locate the correct payee.

⚠️ PRO Registration Does Not Cover Your Mechanical Royalties

Registering with ASCAP or BMI only collects public performance royalties. Mechanical royalties from streaming require a separate registration with the MLC. Your name spelling, ISWC codes, and ownership splits must match exactly across both systems — even a small mismatch can cause payments to be delayed or held.

How to Claim Unpaid Digital Music Royalties

If you are a songwriter or publisher who has not yet registered with the MLC, there is a strong chance that royalties have accumulated in your name without being distributed. The MLC maintains a publicly searchable database of unmatched royalties, and filing a claim is free and straightforward. Create an account at the MLC portal, search for your works by title, ISWC, or co-writer name, and submit a claim with your ownership details and percentage splits. Having a signed split sheet on file for each composition will speed up the review process significantly.

One myth worth addressing: some creators believe unclaimed MLC royalties are lost forever after a set deadline. The truth is more nuanced. While the MLC does eventually distribute unclaimed funds to known rights holders on a market-share basis after a holding period, registering your works and filing claims before that redistribution occurs is the single most effective step you can take to protect your income. Set a quarterly reminder to check your MLC account for new unmatched works or metadata discrepancies.

MLC Claim Checklist

Create a free account at the MLC portal (themlc.com)
Search for unmatched works by title, ISWC, or co-writer name
Submit ownership details including your percentage split and co-writer information
Attach split sheets to support each claim
Verify name spelling matches exactly across MLC, PRO, and distributor
Set a quarterly review to catch new unmatched works before redistribution

Closing the Loophole for Pre-1972 Sound Recordings

Classic 70s and 80s Songs Digital Performance Rights

Before the Music Modernization Act, sound recordings fixed before February 15, 1972, were not covered by federal copyright law for purposes of digital performance royalties. Classic tracks from the 1960s, 70s, and 80s could be streamed on satellite radio and internet radio platforms without any federal obligation to pay digital performance royalties. Some state laws offered partial protection, but enforcement was inconsistent and expensive.

The exclusion created a two-tiered system in which a song recorded in 1971 and a song recorded in 1973 were treated entirely differently by digital platforms, despite being consumed by the same listeners in the same way. For legacy artists and their estates, this was not merely an academic legal distinction. It translated directly into lost income during a period when streaming was rapidly replacing physical sales as the dominant revenue source for catalog music.

How the CLASSICS Act Restored Rights for Legacy Artists

The CLASSICS Act extended federal digital performance rights to pre-1972 sound recordings for the first time. Owners of those older recordings are now entitled to royalties from non-interactive digital services such as SiriusXM and Pandora, collected through SoundExchange. The protection applies on a tiered schedule, with recordings from 1957 onward receiving protection for varying durations and the oldest recordings eventually entering the public domain.

If you own or control pre-1972 masters, confirming your SoundExchange registration and ensuring your catalog metadata is accurate should be a priority. Note that the CLASSICS Act applies specifically to digital audio transmissions and does not alter the broader copyright status of these recordings under other areas of law. Consulting with a music attorney about your specific situation is advisable given the jurisdictional complexity involved.

How the AMP Act Changed Royalties for Producers and Engineers

Direct Payments to Producers via SoundExchange

The AMP Act addressed a long-standing inequity in how producers, mixers, and engineers were compensated for their contributions to sound recordings. Before this legislation, producers who had negotiated a royalty share on a recording had to rely on the featured artist or label to pass along their portion of digital performance royalties collected by SoundExchange. If the artist was unresponsive, disorganized, or in a contractual dispute, the producer simply did not get paid.

Under the AMP Act, producers and engineers can now receive their share of SoundExchange royalties directly, provided the featured artist sends a letter of direction to SoundExchange confirming the arrangement. This removes the middleman problem and gives studio professionals a direct financial relationship with the entity distributing the money.

Why Producers and Engineers Now Have a Legal Right to Royalties

The significance here extends beyond convenience. The AMP Act codified a legal framework that recognizes the creative and financial contributions of non-featured participants in a recording. Before the law, a producer's right to digital performance royalties existed only as a contractual matter between private parties, with no statutory mechanism for enforcement through SoundExchange.

Now, if you are a producer or engineer with a royalty agreement on a commercially released recording, you have a statutory pathway to collect. The process involves the featured artist submitting a letter of direction, after which SoundExchange allocates your share directly to your account. For recordings where the featured artist is deceased or unreachable, the AMP Act includes provisions allowing producers to submit their own documentation. Keeping clear records of your agreements, including signed contracts and split sheets specifying your points, is essential to making this process work.

⚠️ Producers: Your Royalties Are Not Automatic

The AMP Act created the legal pathway for producers to get paid, but it does not trigger payments on its own. A letter of direction must be submitted to SoundExchange by the featured artist for your share to be paid directly to you. If this hasn’t been completed, your royalties may still be routed to the artist or label instead of your account.

What the Music Modernization Act Means for Your Royalties Today

The Music Modernization Act did not solve every problem in music compensation, but it closed some of the most damaging gaps that had persisted for decades. Songwriters now have a centralized system for collecting mechanical royalties from streaming through the MLC. Legacy artists with pre-1972 recordings are no longer excluded from digital performance income. Producers and engineers have a direct legal path to the royalties they earned in the studio.

The law built the infrastructure. Collecting what you are owed still requires you to show up and maintain your records. Metadata errors creep in over time, co-writer information changes, and new recordings enter the system. Set a biannual reminder to audit your registrations across the MLC, your PRO, and SoundExchange. The few hours it takes to get everything aligned is worth far more than the royalties that quietly disappear when it is not.

Your MMA Action Checklist

Register your catalog with the MLC at themlc.com if you haven’t already
Verify metadata consistency across the MLC, your PRO, and your distributor
Search the MLC unmatched database for works that may belong to you
Confirm SoundExchange registration for all recordings, including pre-1972 masters
Producers & engineers: verify letters of direction are on file
Set a biannual audit reminder to catch new discrepancies early

Find Out What Your Catalog Is Owed

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Frequently Asked Questions

What did the Music Modernization Act actually change?

The MMA restructured three major gaps in US music copyright law. It created a blanket mechanical license administered by the MLC so streaming services no longer had to clear mechanical rights song by song. It extended federal digital performance rights to pre-1972 sound recordings through the CLASSICS Act. And it allowed producers and engineers to receive SoundExchange royalties directly through the AMP Act, rather than relying on the featured artist to pass payments along.

Do I need to register with the MLC separately from my PRO?

Yes. PRO registration with ASCAP, BMI, or SESAC covers public performance royalties only. Mechanical royalties from interactive streaming are administered by the MLC, which is a completely separate organization. If you have not registered your compositions with the MLC, those mechanical royalties are sitting unmatched in the system and may eventually be redistributed to other publishers based on market share rather than actual ownership.

What happens to unclaimed royalties at the MLC?

Unmatched royalties are held by the MLC for a defined period while the organization attempts to identify and locate the correct rights holders. After that holding period, the funds are distributed to copyright owners that are known to the MLC, weighted by market share. Registering your works and filing claims before that redistribution window closes is the most reliable way to ensure the money reaches you rather than being allocated to larger publishers.

Who qualifies for pre-1972 sound recording royalties under the CLASSICS Act?

Owners and performers of sound recordings fixed before February 15, 1972, are eligible for digital performance royalties from non-interactive services such as SiriusXM and Pandora. These royalties are collected through SoundExchange. If you own or control pre-1972 masters, you need to register them with SoundExchange and ensure your catalog metadata is accurate to receive payments. The CLASSICS Act applies specifically to digital audio transmissions, not to other categories of copyright.

How do producers collect their AMP Act royalties?

The featured artist on the recording must submit a letter of direction to SoundExchange specifying the producer's royalty share and authorizing direct payment. Once that letter is on file, SoundExchange will allocate the producer's or engineer's portion directly to their account rather than routing it through the artist or label. If the featured artist is deceased or unreachable, the AMP Act includes provisions for producers to submit their own documentation to establish their claim.

How often should I audit my registrations across the MLC, PRO, and SoundExchange?

A biannual audit is a practical minimum for most catalogs. Metadata errors accumulate over time as new recordings are added, co-writer information changes, or publisher details are updated on one platform but not another. A quarterly check of the MLC unmatched royalties database is also worth building into your routine, particularly if you are releasing new music regularly. The goal is to catch discrepancies before they result in held funds or misrouted payments.

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