The U.S. Copyright Office announced on February 5, 2026, that it received notices from the Mechanical Licensing Collective (MLC) intending to audit three digital music providers operating under the blanket mechanical license. The providers targeted are CheckTheVolume.com, MedRhythms, Inc., and Music Health Pty Ltd. These audits will examine royalty payments for the period from January 1, 2022, to December 31, 2024. This step stems from provisions in the Orrin G. Hatch-Bob Goodlatte Music Modernization Act (MMA) of 2018, which reformed the compulsory licensing system for musical works in the digital space. By publicizing these intents, the Copyright Office fulfills its statutory duty to promote transparency in royalty distribution, a critical issue for songwriters and publishers who rely on accurate reporting from streaming services. This notice underscores the MLC's role in safeguarding the financial interests of music creators amid the rapid growth of digital music consumption.
Background on the Music Modernization Act and Blanket License
The MMA, enacted in October 2018, represented a major overhaul of the U.S. copyright system for mechanical licenses, which cover the reproduction and distribution of nondramatic musical works in phonorecords. Prior to the MMA, digital music providers (DMPs) had to obtain individual mechanical licenses for each work they streamed, a process often criticized as inefficient and prone to errors. The law introduced a blanket license administered by the MLC, a nonprofit entity designated by the Copyright Office in 2019. Under this system, DMPs pay royalties to the MLC, which then distributes them to rights holders.
The MMA's audit provisions, outlined in 17 U.S.C. 115(d)(4)(D), empower the MLC to verify the accuracy of these payments. Audits can cover up to three years of records and must be conducted by qualified auditors. The process begins with a notice of intent filed with the Copyright Office and delivered to the audited parties. The Office then publishes a summary in the Federal Register within 45 days, as required by 17 U.S.C. 115(d)(3)(L)(i)(IV) and 115(d)(4)(D)(i)(IV). This framework aims to address historical issues like unmatched royalties, where payments could not be linked to rightful owners, estimated to total hundreds of millions of dollars before the MMA.
Key players include the MLC, led by figures such as Kris Ahrend, its CEO, who has emphasized the collective's commitment to transparency. The audited DMPs vary in scope: CheckTheVolume.com appears to be a music streaming or analysis platform, while MedRhythms, Inc. focuses on music-based therapeutic applications, and Music Health Pty Ltd. provides music services possibly in health or wellness contexts. These entities represent a cross-section of the digital music ecosystem, from entertainment to specialized uses.
Legal and Procedural Framework
The audit process draws from precedents in copyright law, including earlier mechanical licensing regimes under Section 115 of the Copyright Act. For instance, pre-MMA audits by organizations like SoundExchange for performance royalties set models for verification, though the MLC's blanket license introduces collective administration. The MMA built on cases like the 2015 settlement between Spotify and the National Music Publishers' Association over unpaid royalties, which highlighted the need for systemic reforms.
In this notice, the MLC's filing on December 26, 2025, triggers a structured timeline. Audited DMPs must provide access to records, and the MLC can seek remedies if discrepancies are found, such as adjustments to payments. The Copyright Office's role is administrative, ensuring notices are published and copies made available online at https://copyright.gov/music-modernization/audits/. This transparency aligns with broader federal efforts to modernize copyright administration, as seen in the Copyright Office's 2020 rulemaking on MLC operations.
Political forces influenced the MMA's passage, with bipartisan support from lawmakers like Senators Orrin Hatch and Bob Goodlatte, who championed it amid lobbying from the Recording Industry Association of America and songwriters' groups. Industry stakeholders, including DMPs like Spotify and Apple Music, initially resisted but ultimately endorsed the bill for its streamlined licensing.
Implications for the Music Industry
Short-term implications include potential disruptions for the audited DMPs, who may need to allocate resources for compliance and record reviews. If inaccuracies are uncovered, back payments could benefit rights holders, reinforcing trust in the MLC. For example, the MLC has already distributed over $1 billion in royalties since 2021, but audits ensure these figures are precise.
Long-term, these audits could set precedents for accountability in digital music. They may encourage DMPs to improve reporting systems, reducing future disputes. From the perspective of songwriters and publishers, represented by groups like the Songwriters of North America, audits are a vital check against underpayment in an industry where streaming dominates revenue. DMPs, however, might view them as burdensome, arguing that the blanket license already simplifies obligations. Neutral observers, such as legal scholars, note that while the MMA has reduced litigation, challenges persist in matching works to owners, especially for independent artists.
Different viewpoints highlight tensions: Rights holders praise the MLC's proactive stance, as evidenced by statements from MLC board members like songwriter Danielle Ponder, who has advocated for fair compensation. In contrast, some DMPs have critiqued audit scopes as overly broad, potentially stifling innovation in niche markets like therapeutic music services.
Forward-Looking Conclusion
This audit notice marks an important enforcement milestone under the MMA, emphasizing the MLC's oversight role in a evolving digital landscape. Key takeaways include the need for robust compliance mechanisms to protect creators' earnings. Looking ahead, potential next steps involve the completion of these audits, with results possibly influencing future MLC policies or Copyright Office regulations. Ongoing debates center on expanding audit frequencies or integrating technology like blockchain for royalty tracking, while challenges remain in balancing enforcement with industry growth. Stakeholders will watch closely as these processes unfold, potentially shaping the future of music licensing.
