The US Copyright Royalty Board published the final rates and terms for mechanical royalties for songwriters to the Federal Register on Tuesday, making them official more than a year after they were first announced.
The rates cover the period from 2018 to 2022 includes a significant increase in the overall percentage of revenue paid to songwriters from 10.5% to 15.1% over the next five years, equating to an almost 44% jump over the period.
Additionally, the CRB removed the Total Content Cost (TCC) cap, and the TCC starts at 22.0 for 2018 and rises to 26.2 for 2022.
The publication in the Federal Register starts the clock on a 30-day window in which parties that participated in the proceedings setting the rates can appeal the rate decision.
In a post on the National Music Publishers Association’s Facebook page on Tuesday, the organization’s president David Israel said:
“The Copyright Royalty Board published today the Final Rates and Terms for songwriters for mechanical royalties (Decision was announced a year ago). NMPA and NSAI fought hard to increase songwriter royalties by 44+%. The digital music companies now have 30 days to decide whether to appeal that ruling and in effect declare war against songwriters. Apple has announced it will not appeal. The others won’t say. We will know soon whether some digital companies want to be partners or want to attack the Songwriters who make their businesses possible. Stay tuned.”
Industry Coalition Makes Bid To Oversea Mechanical Licensing Collective
The implementation of the rate increase comes as a coalition of stakeholders that includes the NMPA, as well as the Nashville Songwriters Association International, and the Songwriters of North America has made a bid to oversee the new Mechanical Licensing Collective. The Collective, mandated by the Music Modernization Act, to administer mechanical rights in the U.S.
The MLC will be funded by administrative fees paid by digital services, who will benefit by being able to obtain a blanket mechanical license from the MLC, saving them from having to license each song. The MLC will collect license fees from each service that may be worth hundreds of millions in royalty payments per year.
Entities wishing to submit a bid to oversee the MLC must do so by March 31st, and to date, only one other competitor – The American Music Licensing Collective – has done so. AMLC’s board includes songwriters Stewart Copeland and Rick Carnes, as well as John Barker, Brownlee Ferguson, Lisa Klein Moberly, and Henry Gradstein.