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Follow on Google News | Songwriters Score Big! Mechanical Royalty Rates Rise To 44% In The UsaDigitalization has created turmoil in the music industry making the potential to compete often impossible.
By: DJ Central From January 27th 2018 onwards mechanical rates will rise to 44%, and this will extend to 2022. Over the next five years, the overall percentage of income paid to songwriters will increase from 10.5% to 15.1% – the highest recorded growth in CRB history. In terms of reality, this is an increase in royalties from $5,000 to $7,200. Furthermore, the CRB ceased the Total Content Cost (TCC) cap. The NMPA then stated that it will "give publishers the benefit of a true percentage of what labels are able to negotiate in the free market resulting in significantly higher royalties for songwriters" This is a breakthrough for independent songwriters, with a more balanced field being established between record companies and musicians. This balance has been further aided by the CRB enforcing a late fee which will dramatically modify the licensing practices of digital music companies. This means that digital music services such as Spotify and Apple will be significantly penalized if they disregard the on-time payment of artists. The NMPA President and CEO David Israelite indicate that "the decision also allows songwriters to benefit from deals done by record labels in the free market. The ratio of what labels are paid by the services versus what publishers are paid has significantly improved, resulting in the most favorable balance in the history of the industry". The enforcement of this notion has taken too long, tiring and stressful years with several artists sharing their unfair experiences to achieve justice for independent songwriters. The goal is to establish an even, respectful and fair industry reducing the ability of streaming services to completely dominate the market. This is the best mechanical rate scenario in U.S. history and it comes at a crucial time. Music is globally accessible without consequence, but this ruling now provides some relief to songwriters trying to make a living in a digitalized, dominating and often deceiving industry. End
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