In a long-awaited and long-delayed decision, songwriters have received a monumental victory from the Copyright Royalty Board (CRB), which finally confirmed the royalty rate increase for the 2018-2022 period. And that means that many songwriters could soon see a retroactive bonus in royalty backpay.
Last week, the CRB released an official confirmation of the mechanical royalty rate increase for the Phonorecords III period (that covers 2018-2022). This ruling confirms and upholds the increase of royalty rates from 11.4% to 15.1%, which was determined in 2018 for Phonorecords III.
The original determination, made in early 2018, marked a huge win for the songwriter community as they were set up to receive more royalties than ever before. However, in 2019, music streaming services — except for Apple Music — began the appeal process for this ruling thus putting a hold on songwriters receiving the royalties they were owed.
Since the initial appeal, songwriter groups and music publishers have been making their case to the CRB to pay songwriters fairly, while the music streaming services have argued to pay songwriters less.
As lawyers on both sides hashed out the appeal, songwriters have not been receiving the increase in royalty rates that were originally decided in 2018 — an estimated loss of hundreds of millions in royalties owed to songwriters. Thankfully, last week's confirmation will finally allow songwriters to be paid the correct and increased amount of royalties they were owed during the 2018-2022 period in the form of back pay from the streaming services.
For the last several years, going back to the start of the Phonorecords III determination process, the Recording Academy has been vocally advocating for songwriters and composers to earn a more fair royalty rate, and stood with its songwriter members throughout the drawn out legal fight. Upon last week's decision by the CRB, Susan Stewart, Managing Director of the Songwriters & Composers Wing, and Evan Bogart, Chair of the Songwriters & Composers Wing, released this statement:
"We're grateful that the Copyright Royalty Board has officially confirmed the long overdue mechanical royalty rate increase. Songwriters are the backbone of the music community and must be paid fairly to keep our vibrant music ecosystem thriving. The Academy's S&C Wing will continue to support reform to strengthen protections for all songwriters and composers, which in turn, will help our entire industry flourish."
Although the process does not technically end here, the pathway to songwriters receiving the royalties they have rightfully earned is clear and bright. Following last week's confirmation, there will be a 15-day window for rehearing motions that will take place. Next, there will be a legal review for errors conducted by the Copyright Office which could take up to 60 days.
Once those two periods are concluded, the determination will be completely public and streaming services will have six months to make arrangements and payments for the mechanical royalty rates they owe songwriters from the 2018-2022 period. After a lengthy period of appeals between songwriters and streaming services, this is an incredible win for the songwriter community who will likely receive hundreds of millions in owed royalties in the coming months.
And the hard-fought victory also set the stage to give the songwriter community more certainty for the next royalty period that began in 2023. In September 2022, looking to avoid another legal headache, the digital music platforms, music publishers, and songwriters agreed to a settlement for Phonorecord IV (the period of 2023-2027) that will raise the royalty rates even further.
The Recording Academy applauds the songwriters who fought for fair market royalties and looks forward to continuing to support and empower all songwriters for both the remainder of this process and in the future fight for fair pay.
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