Published
Wed, Jul 6, 2022, 17:20
- The new mechanical royalty rate is set at 15.1 percent from 2018 through 2022.
US copyright judges recently upheld a 2018 decision to raise royalty rates by 44 percent for publishers and songwriters.
Following years of deliberation, the Copyright Royalty Board (CRB) ruled that streaming platforms will pay a 15.1 percent mechanical royalty rate from 2018 through 2022. The previous rate was 10.5 percent for the 2013- 2017 period. The 15.1 percent rate was first decided in 2018 but an appeal by major streaming giants, including Spotify, Google, Amazon and Pandora, has been underway since 2019. Throughout the appeal, publishers and songwriters received a lower rate.
Streaming companies must now back-pay the difference but it's unclear when that will happen. Last month, they requested for more time to pay any potential increases, Variety reported.
"The retroactive increase for American songwriters, is supposed to be paid within six months of the verdict being finalized, but the streaming giants have asked for that time period to be extended, which we strongly oppose," Bart Herbison, executive director of the Nashville Songwriters Association International, said in a press statement. "It is still unknown when songwriters will receive their payments," he continued.
The CRB, in its ruling, also capped the percentage of label revenue, or Total Content Cost. Some new terms, including a change in definition for bundled services, are also more favourable to streaming companies.
Later this year, the CRB is due to decide on a royalty rate for the 2023-2027 period. The National Music Publishers' Association (NMPA) is currently pushing for 20 percent.
For more details on the CRB ruling, read the NMPA statement below.