New Streaming Royalties To Increase By 44 Percent

The mechanical royalty rates from streaming will increase by nearly 44 percent over the next five years, according to ARS Technica.   This comes as a result of a ruling from the United States Copyright Royalty Board after hearings that were held from March through June of last year.

Currently, 10.5 percent of streaming services' monthly gross revenue is assigned to be paid to songwriters and publishers; the payouts are determined by the number of streams in that period. That will rise each year until it reaches 15.1 percent in 2022. This year, the rate will be 11.4 percent; it will be 13.3 percent in 2020, and so on.

Songwriters and publishers have long claimed they've gotten the short end of the stick with regard to streaming music royalties. One songwriter, Nashville-based Kevin Kadish, claimed in 2015 that he received only $5,679 from 178 million Pandora streams. In 2016, the National Music Publishers' Association settled a deal with Spotify to help music publishers and songwriters claim royalties, as the messiness of the current system has led to lawsuits and other negative outcomes.

The National Music Publishers' Association was also involved in the fight for this ruling, alongside the Association of Independent Music Publishers. Variety reports that writers were looking for a per-stream rate but did not achieve that goal. However, higher rates are still seen as a victory. That's partly because of the significant rate increase, but also because the ruling further simplifies and streamlines the terms by which the rates are paid out.

Writers will now receive royalties calculated from the new percentage on whichever is higher—the revenue or the total content costs.