Wed. Nov 30th, 2022
Jimmy Iovine announces Apple Music in 2015.

Jimmy Iovine announces Apple Music in 2015.

Streaming mechanical royalty rates — royalties paid to songwriters and publishers, as opposed to those paid to artists — are set to rise nearly 44 percent over the next five years. This is the result of a ruling by the United States Copyright Royalty Board after hearings held from March through June last year.

Currently, 10.5 percent of streaming services’ monthly gross revenue is allocated to songwriters and publishers; the payouts are determined by the number of streams in that period. That will increase every year to 15.1 percent in 2022. This year it will be 11.4 percent; in 2020 it will be 13.3 percent and so on.

Songwriters and publishers have long claimed that they were short on streaming music royalties. A songwriter, Kevin Kadish of Nashville, claimed in 2015 that he received only $5,679 from 178 million Pandora streams. In 2016, the National Music Publishers’ Association struck a deal with Spotify to help music publishers and songwriters claim royalties, as the messiness of the current system has led to lawsuits and other negative outcomes.

In addition to the Association of Independent Music Publishers, the Association of National Music Publishers was also involved in the battle over this ruling. Variety reports that writers were looking for a per-stream rate, but they didn’t reach that goal. However, higher rates are still seen as a win. This is partly due to the significant rate increase, but also because the ruling further simplifies and streamlines the conditions under which the rates are paid.

Writers now receive royalties that are calculated based on the new percentage that is higher: revenue or total content cost. This ruling also removes pre-existing limits on what publishers and songwriters could receive, and it applies a late fee to streaming services that fail to pay on time.

The decades-long process of moving digital music from a disruption of the law to a stable business in which all actors are compensated fairly and in a timely manner has been slow. But this isn’t the end of the story either; the US Congress is reviewing a new bill called the Music Modernization Act. The law would base mechanical royalties on rates in an open market, change the rules of lawsuits regarding royalty rates, and form a collective to administer all of the above.

By akfire1

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