Songwriters & Publishers Due Nearly $400M After Final Streaming Royalty Rate Determination

Music

The Mechanical Licensing Collective expects another $10 to $15 million to be added to the total once additional reports come in from DSPs.

Maarten Wouters/GI

Songwriters and publishers are due nearly $400 million in additional payouts following the Copyright Royalty Board‘s Phonorecord III final determination in August, according to information the Mechanical Licensing Collective (the MLC) released on Friday (Feb. 23).

During the Phono III blanket license period (2021-2022), the MLC reports that digital service providers like Spotify, Amazon Music, YouTube and Pandora underpaid rightsholders by $419.2 million — $281 million from mechanical royalties and $137.8 million from performance royalties. Those underpayments were due to the fact that final rates were higher than the interim rates during the more than four-year royalty dispute between publishers and streamers.

However, the DSPs actually overpaid publishers for mechanical royalties during the Phono III historical unmatched period (2018-2020) to the tune of $28.8 million. That would cut down the total bonus owed to songwriters and publishers to roughly $390.3 million.

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The DSPs were given until Feb. 9 to review and adjust their past payments following the CRB’s final determination, though several did not submit the required adjustment reports by the deadline, according to the MLC, which expects adjustments to increase by another $10 to $15 million once those additional reports come in.

The MLC notes that the amounts are estimates only and subject to change pending its official calculations.

“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,” said NMPA president/CEO David Israelite 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.”

A full breakdown of the adjustments from the individual DSPs is available on the MLC website.

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