After a yearslong process, the Copyright Royalty Board (CRB) has officially published their determination on Phonorecords III — meaning songwriters will start to receive back pay on royalties they were owed from 2018-2022.
As the Recording Academy covered earlier this year, the CRB announced a confirmation of the mechanical royalty rate increase from 10.5% to 15.1% for the Phonorecords III period (that covers 2018-2022). Despite that ruling occurring earlier this year, the process was not officially complete until the determination was published this month.
This is a monumental win for songwriters and composers, who will soon begin to receive the additional owed royalties. To help break down some common questions, the Recording Academy put together a brief FAQ on what this means for songwriters:
How much will songwriters receive?
While the final calculation is not publicly known, some reports estimate that digital streaming services will owe as much as $200 million to songwriters and publishers from Phonorecords III.
When will songwriters begin to receive the backpay?
Songwriters can expect to begin to receive their share of the owed royalties no later than February 2024 — streaming services have six months from August 10 to make arrangements and payments for the mechanical royalty rates they owe songwriters from 2018 to 2022.
How will songwriters collect the backpay?
The Mechanical Licensing Collective is expected to pay any owed royalties that were incurred in 2021 or 2022, which is when it was operational following the passage of the Music Modernization Act.
For royalties owed from 2018 to 2020, the digital platforms will be responsible for making proper payments and may contract with a third-party vendor for processing.
Will there be any oversight to this process?
The U.S. Copyright Office and Congress are monitoring this important process. In addition, stakeholders including the Recording Academy and its Songwriters & Composers Wing will work to ensure that payments are paid properly and timely.
The Recording Academy has been vocal in advocating for songwriters and composers throughout this entire process and has continually pushed for these artists to receive a fairer royalty rate for their works.
Now that the determination has been publicly released, payments to songwriters and composers must be done in an efficient and accurate manner.
The Academy intends to continue following the process and advocating for these artists to receive the payments they have earned.
