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.
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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).