🎼 📝 Why Register with BMI and The MLC: Performance Rights, Mechanical Royalties, and the Structure of Music Copyright Revenue That DistroKid Cannot Collect 🇯🇵

Introduction

Jun OKUNO has been officially approved for registration with BMI (a U.S. performing rights organization) and The MLC (a streaming royalty collection organization).

This has established a system for properly receiving copyright royalties generated as a songwriter/composer for tracks played on streaming services like Spotify, both in the U.S. and internationally.

While the mechanisms for music release and distribution have changed significantly over the last decade, the "collection of copyright revenue" behind the scenes remains one of the most difficult to understand and easily overlooked areas.
The structure where whether you are registered with the appropriate organization determines the existence of revenue—rather than just where the work is heard—is a crucial point, especially for international distribution.

In this article, focusing on the two types of royalties known as "performance rights" and "mechanical royalties", I will organize the roles of BMI and The MLC, and their relationship with the distribution structure surrounding services like Spotify.
I hope this serves as a useful reference for those interested in "building the mechanisms" to make music activities sustainable.

Chapter 1: What are Performance Royalties?

"Performance rights" are royalties generated when music is "publicly performed" via radio, television, live performances, streaming, etc..
These are not paid to performers or record labels, but are paid to the songwriters and composers, and are essentially compensation for the "work itself."

In Japan, JASRAC and NexTone manage these rights, but in the U.S., BMI (Broadcast Music, Inc.) and ASCAP fulfill this role.
Jun OKUNO is registered with BMI, and the IPI number is 01299495678.

Even on streaming services like Spotify, a very small performance royalty is generated for every single play.
However, Spotify does not pay these royalties directly to the artist themselves or the distribution agency (distributor).
They pay them to a performance rights organization (e.g., BMI), which then distributes them to the songwriters and composers.

In other words, if you are not registered with BMI, even if Spotify has paid the performance royalties, the songwriter/composer cannot receive any of that compensation.

Chapter 2: What are Mechanical Royalties?

"Mechanical royalties" are copyright royalties paid for the copying (reproduction) of a musical work.
Originally, this right was based on "physical reproduction" such as CDs or downloads, but today it also occurs with streaming playback on services like Spotify and Apple Music.

Like performance rights, these royalties are also compensation that should be paid to the songwriter/composer, but they are managed by a different organization than performance rights.

In the U.S., since 2021, a government-designated non-profit organization called The MLC (The Mechanical Licensing Collective) has taken on this role.
The MLC has a system to distribute royalties collected from Spotify and others to registered songwriters and composers.

It is important to note here that even if you distribute your music through a distributor (like DistroKid or TuneCore), no mechanical royalties via The MLC will be paid.
The structure is such that it only becomes eligible for collection once the songwriter/composer themselves registers with The MLC.

Note that The MLC only covers mechanical royalties generated by streaming within the United States, and while plays outside the U.S. may be processed through partnerships with organizations in each country, there is no complete guarantee.

Chapter 3: It Doesn't End with Releasing on Spotify—The Relationship Between Distribution Platforms and Organizations

3-1. The Role of Distribution Platforms

Distribution platforms like Spotify and Apple Music play the role of delivering music to users, but they are also the "starting point" that generates copyright royalties.
When a play occurs, three types of revenue are generated as follows:

1. Master recording royalties (= compensation for record producers/distributors)

2. Performance Royalties = Compensation for songwriters and composers

3. Mechanical Royalties = Same as above

3-2. The Role of Distributors (like DistroKid)

Distributors such as DistroKid and TuneCore are responsible for delivering master recordings to platforms like Spotify and receiving the usage fees for them. In other words,
1. Master usage fees paid by Spotify are delivered to the artist via the distributor.

However, 2. Performance royalties and 3. Mechanical royalties are unrelated to the distributor. Spotify pays these
directly to copyright management organizations like BMI and The MLC, and they are not collected through the distributor at all.

DistroKid itself explicitly states in its official documentation, "We are not involved in Publishing (the rights of songwriters and composers)."

3-3. The Role of Copyright Management Organizations

• BMI → Management and distribution of Performance Royalties

• The MLC → Management and distribution of Mechanical Royalties (within the U.S. only)

If you are not registered with these two organizations as a songwriter or composer, no matter how much Spotify pays in royalties, that money will not be distributed to anyone and will remain held or unclaimed. After a certain period, the rights may expire, or the funds may be pooled by the organization.

3-4. Why Jun OKUNO is registered

Jun OKUNO uses DistroKid to distribute music globally.
However, understanding that there is revenue that cannot be collected via DistroKid, I registered with both BMI and The MLC myself.

Of the revenue generated from streams on Spotify and other platforms, master usage fees can be received via DistroKid, but performance and mechanical royalties will remain at zero unless you register.

Therefore, I concluded that these two registrations are essential to correctly receive compensation as a songwriter and composer.

Conclusion

Many people think that "if I put my music on Spotify, all the revenue will automatically come in."
But in reality, Spotify pays three types of royalties to different parties, and of those, most of the compensation as a songwriter or composer cannot be received unless you register yourself.

Registration with BMI and The MLC is a safeguard against that structure.
As for Jun OKUNO, my stance on the mechanisms of copyright and revenue is to set them up calmly and methodically.

Additionally, copyright revenue on video platforms like YouTube (so-called Content ID revenue) is not managed by BMI or The MLC, and requires management by separate entities like AdRev or Identifyy. Jun OKUNO has opted out of Content ID for now due to cost-effectiveness. Furthermore, revenue as a performer or record producer (neighboring rights) is handled by organizations such as
SoundExchange in the U.S. and NexTone in Japan, which require separate registration.

I hope this article serves as a practical starting point for those considering global distribution or those who are already distributing but have questions about their revenue.

Supplementary Information

Jun OKUNO Copyright Registration Information:

• BMI IPI: 01299495678

• The MLC Registration Completed

Reference Links (English)

• BMI (Broadcast Music, Inc.)
  https://www.bmi.com/

• The MLC (Mechanical Licensing Collective)
  https://www.themlc.com/

• DistroKid – Royalties & Payments Guide
  https://support.distrokid.com/hc/en-us/articles/360013534293

• Identifyy (YouTube Content ID)
  https://www.identifyy.com/

• SoundExchange (Neighboring Rights)
  https://www.soundexchange.com/

Thank you for reading until the end. If you enjoyed this, please like and follow. I would be overjoyed if you left a comment.

If you are interested in Jun OKUNO's music, please feel free to listen to it as much as you like.