Streaming mechanical licenses are causing significant challenges in music royalty payments, particularly affecting songwriters. Here's a detailed analysis of potential solutions to fix this complex system.

The Current Problem:

• Spotify's bundling practices are negatively impacting mechanical royalties
• Major publishers (controlling 70% of revenue-earning songs) remain protected
• Songwriters are the primary victims of the current licensing scheme
• Song rights revenue is capped at 20% of streaming revenue

Two Proposed Solutions:

1. Eliminate Streaming Mechanical Royalties

• Reclassify streaming rights as solely "public performance" rights
• Transfer all licensing responsibilities to PROs (ASCAP, BMI, SESAC)
• Enable direct payment flow to songwriters
• Eliminate complicated mechanical licensing processes

2. Implement Unified Arbitration

• Create single hearing for all stakeholders (labels, publishers, songwriters)
• Follow app store revenue model
• Platform takes operating costs
• Content owners split remaining revenue
• Use arbitration panel for fair allocation

Key Benefits:

• Streamlined royalty collection and distribution
• Direct payments to songwriters
• More transparent negotiation process
• Reduced administrative complexity

Challenges:

• Publishers may resist changes
• Lack of unified songwriter representation
• Complex legislative requirements
• Industry stakeholder opposition

The Role of PROs:

• ASCAP and BMI could serve as primary negotiators
• PROs have established payment systems
• Experience in rights management
• Charter to protect songwriter interests

Implementation would require significant legislative changes and industry cooperation, but could create a more equitable streaming royalty system for all parties, especially songwriters.

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