How does the Mechanical Licensing Collective pay songwriters, and what happens to unclaimed royalties?

For songwriters who administer their own catalogs, streaming mechanicals are one of the easier parts of music publishing income to overlook, because the money moves through a collective most writers never deal with directly. This page covers the Mechanical Licensing Collective (the MLC), what you need on file to be paid, and what happens to money nobody claims. Our main entertainment law page has the wider picture.

How a streaming mechanical reaches a songwriter, step by step

1. A service streams or sells your song under the blanket license described below.
2. The service reports and pays monthly. Usage reports and royalties are due to the collective 45 calendar days after the end of each month (17 U.S.C. 115(d)(4)(A)(i)).
3. The collective matches the recording to the song and to the owners and shares in its database (17 U.S.C. 115(d)(3)(C)).
4. Matched royalties go out monthly with a royalty statement, to the payee in the collective's records on the date it takes its payee snapshot for that distribution (37 CFR 210.29(b)(1), (3), (4)).
5. Unmatched money waits. It is held at interest for at least three years, and an owner who comes forward during that time can still be paid (17 U.S.C. 115(d)(3)(H), (I)).
6. Unclaimed money is distributed by market share after the hold, with public notice at least 90 days ahead (17 U.S.C. 115(d)(3)(J)).

What is the blanket license, and where does the MLC fit?

Since the Music Modernization Act, a digital music provider that qualifies for the section 115 compulsory license can obtain one blanket license through the mechanical licensing collective for its permanent downloads, limited downloads and interactive streams of songs (17 U.S.C. 115(d)(1), (e)(7)). A service obtains it by sending the collective a notice of license (17 U.S.C. 115(d)(2)), and the Copyright Office dates the start of the system to January 1, 2021 (Copyright Office MMA FAQ).

The blanket license covers the reproduction and distribution of songs for those uses and does not cover any other right or use (17 U.S.C. 115(d)(1)(B)(iii)), so it runs alongside your performance income rather than replacing it. The rates come from the Copyright Royalty Judges. Our page on the mechanical royalty rate in 2026 covers the numbers. The process is explained in our page on how the Copyright Royalty Board sets rates.

The collective must be a nonprofit created by copyright owners and designated by the Register of Copyrights (17 U.S.C. 115(d)(3)(A)). Digital services fund it through voluntary contributions and an administrative assessment that the Copyright Royalty Judges determine (17 U.S.C. 801(b)(8)).

What is the collective required to do?

Its statutory functions include administering the blanket licenses, collecting royalties and usage reports from the services, identifying the songs in the recordings they report and locating their owners, keeping a musical works database, and running a claims process for unmatched works (17 U.S.C. 115(d)(3)(C)).

The database is where payment starts. For a matched song it lists the title, each copyright owner and that owner's percentage, contact information and, where reasonably available, codes such as the ISWC and the ISRC of recordings of the song (17 U.S.C. 115(d)(3)(E)(ii)). Anyone can search it online free of charge (17 U.S.C. 115(d)(3)(E)(v)).

How does a self-administered songwriter get paid?

The collective distributes royalties according to the usage the services report and the ownership information in its own records (17 U.S.C. 115(d)(3)(G)(i)(II)). A song can be streamed heavily and still pay its writer nothing if no record connects the recording to that writer's share. In practice, being paid comes down to what the collective has on file for you:

• Each of your works, under the titles used on the releases.
• Your percentage share of each work, consistent with what your co-writers and any publisher report. Competing claims can go to the collective's dispute process, which holds the money until the dispute is resolved (17 U.S.C. 115(d)(3)(K)).
• The recordings of each work, which the statute asks owners to supply through commercially reasonable efforts (17 U.S.C. 115(d)(3)(E)(iv)).
• Current contact details, because an owner who has been identified but not located still counts as unmatched (17 U.S.C. 115(e)(35)).

A Copyright Office registration does not replace this step. The Office's guidance says you still need to register with the MLC to receive certain royalties even if your work is registered, and that a work does not need a Copyright Office registration to be eligible for royalties paid through the MLC. Being in the Office's records still matters for statutory royalties on some physical uses, such as CDs and vinyl, and registration adds remedies in an infringement suit, as our page on registering a song's composition and recording explains.

The same system pays you when another artist records your song: streams of the new version are licensed under the services' blanket licenses like any other recording. Our page on licensing a cover song looks at it from the recording artist's side.

What happens to royalties the collective cannot match?

Money the collective cannot pay, because it cannot identify or locate an owner or because a dispute is pending, goes into an interest-bearing account held for the owners entitled to it (17 U.S.C. 115(d)(3)(G)(i)(III)). The statute then sets these rules:

Once the holding period ends, the money becomes unclaimed accrued royalties (17 U.S.C. 115(e)(34)), and the claiming payment applies only to royalties not yet included in a distribution, so timing matters. In its June 2026 notice, the Copyright Office reported that the collective had not yet distributed unclaimed royalties and plans to begin monthly market-share distributions of unmatched and unclaimed royalties in early 2027 (91 FR 33208). The notice also relays the collective's statement that recordings with low stream counts and minimal royalties are less likely to be matched, which is a good reason to search the public database for your own titles now.

Who oversees unclaimed royalties?

The statute requires the collective's board to appoint an unclaimed royalties oversight committee of 10 members: 5 musical work copyright owners and 5 professional songwriters whose works are used in covered activities (17 U.S.C. 115(d)(3)(D)(v)). That committee sets the policies and procedures for distributing unclaimed accrued royalties and interest, subject to board approval (17 U.S.C. 115(d)(3)(J)(ii)). A separate dispute resolution committee of at least 6 members, split equally between owners and songwriters, handles ownership and allocation disputes (17 U.S.C. 115(d)(3)(D)(vi)).

As the Music Modernization Act directed, the Copyright Office, in consultation with the Government Accountability Office, has also issued a public report recommending ways the MLC can find owners with unclaimed royalties, encourage claims and reduce how much goes unclaimed (Copyright Office Unclaimed Royalties Study).

Has the MLC's designation been reviewed?

Yes. The Register of Copyrights must review the designation every five years, starting with a January notice that asks whether to continue it or designate a different entity (17 U.S.C. 115(d)(3)(B)(ii)). After making the initial designations in July 2019, the Copyright Office opened its first periodic review with a notification of inquiry dated January 30, 2024, and completed it with a final rule dated June 3, 2026, continuing Mechanical Licensing Collective, Inc. as the MLC and Digital Licensee Coordinator, Inc. as the digital licensee coordinator. The Office states that the next review will begin in January 2029 (Copyright Office designation review).

What changes the answer

• How the service is licensed. A service's voluntary license with an owner takes those songs, or shares, out of the blanket license (17 U.S.C. 115(d)(1)(C)).
• The kind of use. The collective handles downloads and interactive streams. Public performance is licensed separately, often through the organizations described in our page on performing rights organizations and the consent decrees. Statutory royalties for CDs and vinyl are paid by the licensee to the owner, outside the collective (17 U.S.C. 115(c)(2)(I)).
• Who owned the song that month. The owner of a work or share on the last day of a monthly reporting period is entitled to that month's royalties unless the entitlement was transferred (37 CFR 210.29(b)(4)(i)(A)).
• Whether the money has been distributed. A late claim reaches only royalties not yet included in a market-share distribution (17 U.S.C. 115(d)(3)(I)).
• Your deal with a publisher. A writer's share of market-share money depends on the 50 percent floor in the statute and on the writer's contract, which our page on publishing deals covers.

A worked example

Common mistakes

• Treating a Copyright Office registration as enough. The Office says you still need to register with the collective to receive certain royalties.
• Submitting titles that differ from the release titles, or leaving the recordings off, which makes matching harder.
• Claiming shares that, with your co-writers' claims, total more than 100 percent, which sends the money into a dispute hold. Our post on music copyright ownership disputes shows how those splits go wrong.
• Assuming the 50 percent songwriter floor covers ordinary monthly royalties. It applies to market-share distributions of unclaimed money (17 U.S.C. 115(d)(3)(J)(iv)); your regular share depends on your publishing contract.
• Waiting for a distribution notice before acting. Once money goes into a market-share distribution, it can no longer be claimed as your accrued royalties.
• Selling or assigning a catalog without saying who receives royalties for months of use before the closing date.

What to do this week

1. Search the collective's free public database for every title you wrote or co-wrote.
2. Compare the listed owners and shares with your split sheets, and settle any difference with your co-writers in writing.
3. Gather the recordings of each song, with their ISRCs where you have them.
4. Check the collective's public list of unmatched works for your titles.
5. Update your contact and payment details wherever your works are registered.
6. If a publisher or administrator handles your share, ask it in writing who submits your works to the collective.

Frequently asked questions

Is the MLC the same as SoundExchange?

No. The collective handles mechanical royalties for songs used in downloads and interactive streams. SoundExchange collects for digital performances of sound recordings under a different statutory license, as our page on how artists get paid from internet radio explains.

How often does the collective pay?

Royalty distributions are made monthly, each with a royalty statement (37 CFR 210.29(b)(1), (3)). Adjustments based on corrected service reports from earlier periods are distributed at least once a year (37 CFR 210.29(b)(2)).

Can I audit the collective?

Yes. A copyright owner can audit the collective once a year, covering any of the three calendar years before the audit begins, through a qualified auditor and at the owner's own cost. The owner files a notice of intent with the Copyright Office and sends a copy to the collective, and any underpayment found is paid to the auditing owner (17 U.S.C. 115(d)(3)(L)).

Can I sue a streaming service for streams it never paid for?

The Copyright Office's FAQ explains that past infringement liability is limited to the royalties due if the service met certain requirements, including good-faith efforts to identify and locate the owners. Our page on copyright infringement damages covers what can be recovered in ordinary cases.

If I sell my catalog, who gets this month's royalties?

The owner on the last day of the monthly reporting period is entitled to that month's royalties unless the right was transferred, and the collective pays whoever its records show at the payee snapshot unless it is told otherwise (37 CFR 210.29(b)(4)). The sale agreement and an update to the collective's records should line up.

Zala IP Law advises songwriters, publishers and creators on publishing, registration and royalties. If you think streaming mechanicals on your songs are going unpaid, or your splits need sorting out before a distribution, request a consultation or call 404-313-1701.