Songwriters and music publishers are set to receive a net total of nearly $400 million more in royalties for 2021-2022, thanks to a final ruling on streaming royalty rates.
This follows a years-long battle between creators and streaming services over fair compensation.
The windfall stems from the Copyright Royalty Board’s Phonorecord III determination in August 2023, which established higher royalty rates for music streamed between 2021 and 2022.
This means streaming giants like Spotify, Amazon Music, YouTube, and Pandora underpaid songwriters and publishers by $419.2 million, according to information from the Mechanical Licensing Collective (MLC), highlighting underpayments during the 2021-2022 period.
The MLC was established by the Music Modernization Act of 2018. It serves as the sole entity authorized to collect and distribute mechanical royalties due for the reproduction and distribution of musical works.
However, while underpayments dominated the headlines, streaming services were found to have actually overpaid publishers for mechanical royalties during the previous “historical unmatched period” (2018-2020) by about $28.8 million.
According to the breakdown, Amazon Music overpaid publishers $7.4 million for mechanical royalties, while Apple Music overpaid $17.4 million, YouTube Music overpaid $2.8 million and Spotify overpaid $3.7 million.
This reduces the total bonus owed to creators to roughly $390.4 million.
The news arrives amid major developments at the MLC. The organization is currently undergoing its first-ever re-designation process, in which the US Copyright Office conducts a five-year review of its operations and those of the Digital Licensee Coordinator (DLC).
The MLC also recently announced plans to audit streaming services, ensuring the accuracy of reported and paid royalties. In January, it issued notices of intent to conduct audits of streaming platforms that started operating under the compulsory blanket license administered by the MLC starting in 2021.
■ Copyright Royalty Board (CRB) > https://www.crb.gov/
■ Mechanical Licensing Collective (MLC) > https://www.themlc.com/
■ Digital Licensee Coordinator (DLC) > https://digitallicenseecoordinator.org/
• SOURCE: SONGWRITERS AND PUBLISHERS TO RECEIVE NEARLY $400M PAYOUT AFTER STREAMING ROYALTY RULING IN THE US. Music Business Worldwide > https://www.musicbusinessworldwide.com/songwriters-and-publishers-to-receive-nearly-400m-payout-after-streaming-royalty-ruling/
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