Composers and publishers to receive nearly $400 million due to past underpayments
Image credit: Pepi Stojanovski
DSPs such as Spotify and Amazon Music are set to payout more publishing royalties based on an increased royalty rate.
Back in August 2023, the Copyright Royalty Board’s Phonorecord III case came to a resolution, and determined that higher royalty rates for music streamed between 2018 to 2022 would need to be paid by DSP’s for the use of on-demand digital streaming.
The discrepancy arose from royalty rates being higher than the interim rates used during a four-year dispute between publishers and streamers. Now adjustments have been put in place in correspondence with Phonorecord III new agreed rate.
What royalties were recovered?
Following the MLC’s investigation, there has been an underpayment of $419.2 million in 2021 and 2022 based on reports of adjustment from 14 DSPs including Spotify, Amazon and Apple Music. The MLC has also speculated that there should be a further $10 million from the 7 DSPs who have yet to report their adjustments.
The figure included $281 million in Mechanical Royalties and $137.8 million in Performance Royalties which will be paid to each respective party or PRO.
How will publishing reporting improve in the future?
The last 5 years have seen significant improvement in publishing royalty collection from the inception of the MLC, creation of data tracking agencies such as ICE and DSPs being investigated for underpayments.
Along with this recent royalty recovery, the MLC have also launched an audit into multiple streaming services on the accuracy of their reporting. The MLC have already taken legal action against Pandora, for failing to report all their owed Mechanical Royalties.
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