While some news media -- such as NPR -- describe the transaction between UMG and LOC as a "donation," this description is somewhat complicated. UMG has been paying to store and maintain the collection for over 50 years. UMG, however, believes that the collection of music is not commercially viable. The cost of maintaining the collection apparently outweighs any commercial benefit that the company could receive from marketing this musical treasure.
Under the deal, LOC will get the music and will catalog and digitize it. LOC will then make the music available on a website for the public to access for noncommercial purposes.
UMG, however, will retain any copyrights that it has with respect to the collection. UMG will also have the right to exploit the music commercially once LOC has digitized it. This "donation" seems to benefit UMG greatly.
On the other hand, this project will preserve a legacy of American artistry and make it available to the public. LOC estimates that only 14% of music recorded between the late 1800s and 1960s is commercially available to the public. This project will ensure that a large share of music from this era remains available for future generations to enjoy. And given the contemporary state of contemporary popular music, this is great news.