Mechanical Royalty Rates Rise 44% in America!

ICYMI – This week, Royalty rates paid to songwriters in the US from on-demand subscription streaming will rise by 44% over the next five years following a landmark ruling in the market.

Earlier today (Jan 27) the Copyright Royalty Board (CRB) confirmed its decision concerning the compulsory mechanical rates which will be distributed to writers for 2018 – 2022.

This decision is the result of a trial that took place between March and June of 2017 with the National Music Publishers Association and the Nashville Songwriters Association (NSAI). The likes of Google, Spotify, Apple and Amazon lobbied for the tech community.

The ruling includes a significant increase in the overall percentage of revenue paid to songwriters from 10.5% to 15.1% over the next five years – the largest rate increase in CRB history.

In practical terms, that would mean a near-44% jump in royalties – for example, from $5,000 to $7,200.

Additionally, the CRB removed the Total Content Cost (TCC) cap, which the NMPA says will ‘give publishers the benefit of a true percentage of what labels are able to negotiate in the free market resulting in significantly higher royalties for songwriters’.

The CRB also increased the TCC rate resulting in the most balance between record label and publishing rates in the history of US mechanical licensing.

In addition, the CRB granted a late fee which will dramatically alter the licensing practices of digital music companies.

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