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News / Ioná Corrêa / 27 Feb 2024

$400M For Songwriters and Publishers: The U.S. Streaming Royalty Rate Decision

2 minute read

A new ruling sets up songwriters and publishers in the U.S. to receive $400 million in additional royalty payouts for the years 2021 and 2022

It’s good news for songwriters and publishers in the US. After a long fought battle between streaming services and creators over fair compensation, a new ruling sets songwriters and publishers up to receive $400 million in additional royalty payouts for the years 2021 and 2022. 

Following the Copyright Royalty Board’s (CRB) final decision on the Phonorecords III case in August 2023, which covered the on demand digital streaming rates between 2018 and 2022, the Mechanical Licensing Collective (MLC) released the payout information on Friday 23rd February. The ruling established higher royalty rates for music that was streamed during the years of 2021 and 2022.

The MLC reported that songwriters and publishers were underpaid by $419.2 million dollars during the period in question, the amount including $281 million in mechanical royalties and $137.8 million in performance royalties. This happened because the final rates ended up being higher than the interim rates during a dispute between publishers and streamers – which lasted over 4 years. 

As it turns out, however, the digital service providers (DSPs) actually overpaid mechanical royalties to publishers over the Phono III period between 2018 and 2020 by $20.8 million. This means that the total amount owed to the publishing rights holders could be cut down to about $390.3 million.

Following the CRB’s final determination, the DSPs were provided with a deadline and had until February 9th to review and adjust their past payments. According to the MLC, however, several of them did not submit the adjustment reports in time. The Collective stated that they expect adjustments to increase by anywhere between $10 and $15 million  once the reports come in.

Check out the full breakdown of adjustments for each service provider on the MLC

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