HFA vs the MLC

The mechanical licensing landscape in the United States underwent significant changes with the introduction of the Mechanical Licensing Collective (MLC) following the Music Modernization Act. Understanding the relationship between the traditional Harry Fox Agency and the newer MLC is essential for managing mechanical royalties effectively.

The Harry Fox Agency (HFA)

The Harry Fox Agency has been the primary mechanical licensing organization in the United States since 1927. HFA acts as an intermediary between music publishers and companies that need licenses to reproduce music. They handle licensing, royalty accounting, and distribution to publishers.

HFA's traditional model involves publishers licensing their catalogs through them, and then HFA tracks reproductions and collects royalties from record labels, digital retailers, and other entities that manufacture or distribute music.

The Mechanical Licensing Collective (MLC)

The Music Modernization Act, passed in 2018, created the MLC as a new blanket licensing authority for mechanical licenses. The MLC began operations in 2021 with a mandate to modernize mechanical licensing in the United States.

The MLC introduced a compulsory blanket license system, meaning streaming services and other digital music services can obtain a single license covering all compositions rather than negotiating individual licenses with thousands of publishers.

Key Differences

The MLC operates as a nonprofit organization while HFA is a for-profit company. The MLC focuses specifically on digital mechanical licensing, while HFA handles both traditional and digital licenses.

MLC's blanket license model is more streamlined for streaming services, offering simplified licensing compared to the traditional approach of negotiating individual mechanical licenses with publishers. HFA continues to offer direct licensing services and works with the MLC through various agreements.

How They Work Together

Rather than viewing HFA and MLC as direct competitors, they now operate in a complementary capacity. MLC handles blanket digital mechanical licensing for streaming and some downloads, while HFA continues to license for physical media, imports, and certain other uses.

Many publishers now have catalogs represented through both organizations. The MLC requires publishers to register their works to receive mechanicals earned through their blanket license, while HFA continues as an alternative licensing route.

Registration and Collection

Publishers can register directly with the MLC for free to ensure they receive mechanical royalties from blanket licensees. Independent artists and publishers should register their catalogs with the MLC to capture mechanicals from major streaming services.

HFA membership involves fees but provides additional services and can be beneficial for certain licensing scenarios, particularly those outside the MLC's scope.

The Future

The relationship between HFA and MLC represents a transitional period in music publishing. While MLC's blanket license has streamlined digital mechanical licensing, both organizations will likely continue operating indefinitely, serving different aspects of the mechanical licensing ecosystem.