Phono V Could Reshape Catalog Valuations for Years. Here’s Why Songwriters Should Pay Attention (Guest Column)
The outcome of the upcoming royalty rate proceedings will have long-term consequences for songwriters.
Phono V proceedings, currently underway before the Copyright Royalty Board, are poised to reshape the music industry's catalog valuations for years to come. This rate-setting process is divided into two parts: one for mechanical rates of physical records and another for streaming platforms' calculations and payments of statutory mechanical royalties to songwriters and publishers in the U.S. from 2028 to 2032.
A proposed settlement on physical and permanent download rates was reached on June 29, but the resolution of streaming royalties remains unaddressed. The outcome of Phono V will have significant impacts on songwriters' present and future earnings, thus directly affecting their catalog values. The proceedings will determine whether the royalty rate changes, and even slight adjustments can significantly impact long-term earnings.
Additionally, songwriters contemplating a catalog sale must recognize that future royalty values' uncertainty can negatively affect catalog valuations. The timing of selling a catalog before new rates are confirmed may also lead to settling on a conservative price due to the associated risk. While confidence in music catalog investments persists, options such as royalty financing exist, allowing creators to unlock capital without relinquishing ownership.
As Phono V negotiations progress, understanding these factors becomes crucial for songwriters making crucial decisions about their valuable assets.
Written by urgent.news from Billboard's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
