The streaming music industry needs a major overhaul in how mechanical royalties are handled, with songwriters currently getting the short end of the stick. Here's a detailed analysis of potential solutions:

Current Problems:

• Songwriters suffer from inequitable streaming licensing schemes
• Song rights revenue is capped at 20% of streaming revenue
• Direct licensing of mechanicals isn't a viable solution
• Multiple disconnected negotiations complicate the process

Two Proposed Solutions:

1. Eliminate Streaming Mechanical Royalties:

• Classify streaming as solely a "public performance" right
• Have PROs (ASCAP, BMI, etc.) handle all negotiations and payments
• Enable direct payment flow to songwriters
• Remove mechanical royalty fiction that benefits publishers

2. Unified Arbitration System:

• Create single hearing for all stakeholders
• Follow app store revenue model
• Set platform percentage first
• Let content owners split remaining revenue
• Use federal arbitration panel

Benefits of Reform:

• Streamlined payment systems
• Direct songwriter compensation
• More equitable revenue distribution
• Simplified licensing process
• Reduced administrative costs

The Role of PROs:

• ASCAP and BMI should represent songwriter interests
• PROs have necessary experience and funding
• Need to prioritize songwriter advocacy over publisher interests

Currently, publishers benefit from the mechanical royalty system while songwriters struggle. Reform through either eliminating streaming mechanicals or implementing unified arbitration could create a more equitable system for all parties involved.

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