| # | Provision | Implication |
|---|---|---|
| 1 | Established blanket licensing for digital mechanical royalties | Standardized payment framework |
| 2 | Created MLC as central collection/distribution entity | One place to register, one place to collect |
| 3 | Mandated DSPs transfer historical unmatched royalties | $427M moved into one visible pool |
| 4 | Required monthly detailed usage reporting by DSPs | Unprecedented data transparency |
| 5 | Gave MLC statutory audit authority over DSPs | Accountability mechanism for payment accuracy |
| 6 | Prohibited MLC from deducting fees from distributions | 100% of royalties reach rights holders |
| 7 | Mandated MLC maintain public database & API | 🔑 Open data = open opportunity for builders |
| 8 | Set minimum 3-year holding period before market share distribution | Time window for matching before redistribution |
| 9 | Copyright Office recommended extending to 5 years | More time for rightful owners to claim |
| 10 | Market share distributions begin early 2027 | ⏰ DEADLINE: ~$300M gets redistributed to majors |
| Tool | What It Does | Who Can Access |
|---|---|---|
| Public Search API | Query works database, verify ownership | Publishers, admins, DSPs, tech companies |
| Bulk Data Access | Machine-readable complete MLC database | Subscription-based |
| Data Quality Initiative | Compare publisher schedules against MLC data | Publishers, CMOs, self-admin songwriters |
| Matching Tool | Search unmatched usage data, propose matches | MLC members |
| Claiming Tool | Search for unclaimed shares of registered works | MLC members |
More than 40% of blanket royalties that remain undistributed relate to shares of works already registered in the MLC database that haven't been claimed by the appropriate rights holders. This means the compositions are known — the owners just haven't stepped forward. This is the lowest-hanging fruit for any recovery business. Source: MLC
When a song plays on Spotify, TWO separate royalties are generated:
| Type | Collected By | Paid To | Problem |
|---|---|---|---|
| Performance Royalty | PRO (ASCAP/BMI/SESAC) | Songwriter + Publisher | Most creators register here |
| Mechanical Royalty | MLC | Songwriter + Publisher | Many creators DON'T register → black box |
The MLC will begin distributing remaining unmatched royalties (~$300M) via market share in early 2027. That money goes to major publishers proportionally UNLESS the rightful owners are identified first. Anyone who can match even 10% of $300M recovers $30M for creators. At 15% commission = $4.5M in revenue.
Cross-reference MLC API data, PRO databases, ISRC/ISWC registries, and DSP metadata to find matches current systems miss. Claimy raised €1.5M doing exactly this — analyzing metadata, royalty rates, and usage patterns to find discrepancies. Target: independent songwriters and small publishers.
Revenue: 10-20% of recovered royalties.
40%+ of undistributed royalties are from ALREADY REGISTERED works with unclaimed shares. Build an automated system that monitors MLC database for unclaimed shares matching a client's catalog and files claims automatically.
Revenue: $50-200/mo subscription + 15% success fee on recovered amounts.
Poor metadata is the ROOT CAUSE. Build tools that validate, enrich, and standardize metadata before submission. Match ISRCs to ISWCs at scale (like Luminate WorksMatch). Ensure DDEX compliance.
Revenue: $0.50-2.00/track or subscription for catalog monitoring.
Technology-enabled royalty audits using anomaly detection and ML. Like BMG's StreamSight with Google Cloud — ARIMA models for forecasting, K-means clustering for anomaly detection.
Revenue: Contingency-based (% of recovered underpayments) or fixed audit fees.
International royalties are the biggest remaining gap. Each country has its own CMO with different standards. Register works across major territorial CMOs, monitor international flows, recover cross-border black box.
Revenue: % of international royalties recovered.
As payments become automated, fraud increases. Build KYC/KYA infrastructure. Trolley's Know Your Artist does government ID + live photo + watchlist screening.
Revenue: Per-verification fees or platform licensing.
Consolidate all collection relationships (MLC + PROs + international CMOs + SoundExchange) into one platform. The creators who lose most from the black box are those who can't navigate the system.
Revenue: 10-15% commission on collected royalties.
| Revenue Stream | Units | Price | Annual Revenue |
|---|---|---|---|
| Songwriter subscriptions | 500 creators | $29/mo | $174,000 |
| Recovery commissions (15%) | ~$500K recovered | 15% | $75,000 |
| Total | $249,000 ARR |
| Company | Raised | Approach | Gap |
|---|---|---|---|
| Claimy | €1.5M | AI cross-referencing metadata & rates | Focused on larger artists (Celine Dion) |
| Notes.fm | — | Automated black box discovery | Discovery only, limited claiming automation |
| RoyaltyAmp + SPINDL | — | Forensic MLC claims for majors | Serves major publishers, not independents |
| Luminate WorksMatch | — | ISRC-ISWC matching at scale | Data enrichment, not end-to-end recovery |
| Kobalt | $250M+ | Full publishing admin platform | Mid-to-large publishers, complex platform |
| ??? (YOUR VENTURE) | $0 | AI identity resolution + auto-claiming for independents | Nobody serves the independent songwriter with <50 works |