A recent legal win for songwriters brought the exciting news that mechanical royalties for interactive streaming will be kicking up by roughly 44% over the next five years. Here we look at five important facts artists should keep in mind regarding this increase.
Guest post by Kodi Vonn of Bandbasher
If you haven’t heard, there’s been a major legal win for songwriters over the weekend. The results of a court battle from the summer of 2017 by the Copyright Royalty Board will increase mechanical royalties for “interactive streaming” by 43.8% over five years.
There are a lot of payment ratios, unrevealed aspects of the ruling, and details of the deal yet-to-be-released. Until the whole picture of the ruling is revealed (one in favor of the National Music Publishers’ Association and Nashville Songwriters’ Association International), here are:
5 Things To Know About The 44% Increase In Profits.
- Mechanical royalties for streaming will increase 43.8% over a five-year-period (for example: a $500 check becomes $720). Mechanical royalties to are paid for the use of sound recording material (digital downloads, streaming, CD’s, vinyls, etc.). Mechanical royalties are paid to songwriters/publishers.
- For every $3.82 a label receives in Total Content Cost from streaming services, the songwriter/publisher will receive $1. This is up from $1 for every $4.76 during the previous five years.
- Streaming services will be fined a late fee if they fail to pay quickly enough.
- There are no “Total Content Cost” caps, meaning the potential royalties are unlimited in relation to that content’s streaming performance.
- There are two parts of the ruling in favor of the streaming companies: (1)there will not be a flat per-stream or per-subscriber rate, and (2)unspecified “subscriber discounts” could result in multiple members on a family plan being counted as 1.5 (a compromise proposed by Spotify).