MLC to distribute $400M more to Songwriters, Publishers after final royalty rate determination

The MLC announced that songwriters and music publishers should expect additional payments for 2021-2022 from a total of nearly $400 million underpayments from Spotify, Apple Music, Amazon, and other music streamers.

Since the final streaming royalty rates differed from the interim rates, Spotify and other DSPs were required to submit adjustments to the royalties they previously paid. 

After the retroactive rate hikes, DSPs reported that they had underpaid rightsholders by $419.2 million, including $281 million in mechanical royalties and $137.8 million in performance royalties.

But those same DSPs also overpaid mechanical royalties by $28.8 from 2018-2020, leaving a net owed to songwriters and publishers of about $390.3 million.

Here is a breakdown by service.

The MLC says that several DSPs have not yet submitted the required reports, and they expect the adjustment figures could increase by an additional $10-15 million for the Phono 3 blanket license period

“We are extremely pleased that songwriters and music publishers finally will receive the over $400 million they are owed in mechanical and performance royalties from the 2021-2022 period,” NMPA president and CEO David Israelite said in a statement. “Our appellate win upholding the rate increase we achieved in 2018 will finally net music creators and copyright owners the windfall they should have received years ago. The fact that the majority of this adjustment will be distributed by the MLC in a completely transparent and expedient way is another massive benefit of the Music Modernization Act (MMA) and while we would have preferred it be paid sooner, this is a welcome and critical lift now.”

More details are available from the MLC here.

Bruce Houghton is the Founder and Editor of Hypebot, a Senior Advisor at Bandsintown, President of the Skyline Artists Agency, and a Berklee College Of Music professor.