The Rate Fight That Decides What Streaming Pays Songwriters Through 2032
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The next major fight over songwriter pay has begun. On October 5, 2026, the Copyright Royalty Board opened the streaming portion of the Phonorecords V proceedings, commonly called Phono V.
This process will determine the U.S. mechanical royalty rates for streaming from 2028 through 2032. The outcome will affect songwriters, producers, publishers, streaming services, and anyone whose income depends on the composition side of recorded music.
Reporting from Billboard, AfroBeatsWire, and legal commentary covered through LexBlog has described this as a difficult and closely watched proceeding. Unlike the previous cycle, a quick settlement is not expected. The parties are preparing for a longer fight over how streaming revenue should be shared.
No new rates have been decided. Phono V is still in its proceedings stage, and the final outcome is months away.
What Phono V Is and Why 2028–2032 Matters Now
The Copyright Royalty Board, or CRB, sets statutory mechanical royalty rates in the United States. The rates cover how compositions are paid when music is reproduced and distributed through formats such as physical recordings, downloads, and interactive streaming.
Phono V is the fifth five-year rate-setting cycle. It covers the period from January 1, 2028, through December 31, 2032.
The process is divided into separate tracks. One concerns physical media, permanent downloads, ringtones, and certain bundles. The other concerns interactive streaming services such as Spotify, Apple Music, Amazon Music, and other platforms where listeners choose specific songs on demand.
The streaming proceedings opened on October 5 with formal written submissions, known in the CRB process as direct cases. Streaming services, publishers, songwriter representatives, and other participants use these filings to present their proposed rates, evidence, and arguments.
Phono IV covered the previous period and was known for increasing the streaming mechanical royalty framework. Under that system, the headline all-in rate rises to 15.35% of a service’s U.S. revenue by 2027, although the actual calculation involves several steps and is not the same as a songwriter receiving 15.35% directly.
The next question is whether that framework will increase, stay at a similar level, or change in another direction for 2028 through 2032.
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Why This Cycle Is Different
In earlier CRB cycles, the industry often reached a proposed settlement before the case required a full trial. That does not appear likely this time.
No handshake settlement is expected
Billboard reporting says a settlement is considered unlikely because of growing distrust between songwriter and publisher groups and Spotify. That distrust is connected to disputes over how streaming subscriptions are classified and how those classifications affect songwriter payments.
The disagreements became more visible after streaming services began adding other products to their music subscriptions. Spotify added audiobooks to certain plans, and the company treated some Premium, Duo, and Family subscriptions as bundles under the existing Phono IV language.
Because bundled offerings can receive different treatment under the royalty rules, songwriter and publisher groups argued that the change lowered mechanical payments. Spotify has maintained that it was applying the terms of the settlement already approved under Phono IV.
That disagreement is now part of the background for Phono V. The parties are not only negotiating a number. They are also arguing over the definitions and formulas that determine which number applies.
Physical settlements are receiving more scrutiny
The physical-media side is also facing questions. A proposed settlement covering CDs, vinyl, permanent downloads, ringtones, and certain bundles has received heightened scrutiny from the CRB.
Trade reporting and legal analysis have raised concerns about whether extending the existing structure would amount to “another rate freeze by another name.” The concern is that a system carrying forward an old base rate with limited adjustments could leave songwriters with little meaningful growth, even as production costs and consumer prices rise.
The CRB has not treated the proposed physical-media settlement as final. The Board has requested additional information and placed that part of the process under closer review.
That scrutiny does not mean the proposal has been rejected. It means the CRB is examining whether the terms are reasonable for the full range of participants, including creators who did not negotiate the proposal.
Mechanical Royalties in Plain English
Mechanicals vs. master royalties
Mechanical royalties are paid for the reproduction and distribution of a composition. They belong to the songwriting side of a recording.
If you wrote the melody, lyrics, or underlying composition, you may have a mechanical royalty interest in the song. If you own a percentage of the composition through a split, that percentage may entitle you to a corresponding share of the mechanical income.
Master royalties are different. They are connected to the specific sound recording. The recorded version of the song. The master may be owned by an artist, producer, label, or another rights holder.
One song can therefore generate two different categories of income:
- Composition income: mechanical royalties and performance royalties.
- Sound recording income: master royalties and neighboring-rights income.
The same stream can create money on both sides, but the money travels through different systems.
What a “rate freeze” would mean for a working songwriter
A rate freeze would mean that the framework used to calculate songwriter payments remains essentially unchanged for the new five-year period.
That does not necessarily mean every artist’s check would be identical. Your income can still change based on streams, subscribers, territories, ownership shares, and the success of your catalog.
The concern is about the value of each use. If more music is streamed but the rate does not keep pace with the market, a songwriter may see growth in audience without a comparable increase in composition income.
For an independent songwriter, small differences can add up over millions of streams. A lower rate or a less favorable formula can affect royalty income for years because the CRB sets the statutory framework across the entire period.
Why the streaming rate scales with your career
Streaming is now the main way many listeners consume music. A song may be played in several countries, on multiple playlists, and across different subscription levels without the songwriter being involved in each individual transaction.
That scale makes the rate important. A small catalog with limited streams may not see a major difference immediately. A growing catalog, a song placed on a popular playlist, or a composition recorded by multiple artists can create thousands or millions of uses.
Billboard has reported that mechanical royalties make up a significant portion of the money paid to songwriters and publishers for on-demand streams. The rate-setting process therefore affects not only current income, but also the long-term value of a catalog.
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Practical Steps for Independent Artists
Publishing
Make sure every composition is registered and connected to the correct writers, percentages, and ownership information. An unregistered or incorrectly registered work can be difficult to match to royalty payments.
The Mechanical Licensing Collective, known as The MLC, handles U.S. digital audio mechanical royalties for streaming and downloads. Songwriters and self-administered publishers can register eligible works with The MLC.
Registration does not guarantee that every royalty will be collected, but it puts your work into the system used to identify and distribute eligible mechanical income.
Know your splits and keep split sheets signed
A split sheet records who contributed to a composition and what percentage each person owns. It should be completed and signed before a song is released whenever possible.
Keep copies of split sheets, producer agreements, work-for-hire agreements, and publishing contracts. If a song later earns substantial money, unclear ownership can delay payments or create disputes.
The most important details include:
- Legal names and professional names
- Contact information
- Song title and alternate titles
- Writer percentages
- Publisher information
- Signatures and dates
A verbal agreement may reflect what everyone intended, but a signed document is easier to verify.
Understand your publishing administrator and your PRO
A publishing administrator helps register compositions, collect certain publishing income, and distribute money to the rights holders. The administrator may handle mechanical royalties through The MLC and collect income in other territories.
A performing rights organization, or PRO, handles performance royalties. In the United States, organizations such as ASCAP, BMI, SESAC, and GMR license public performances and distribute performance income according to their rules.
Your PRO and publishing administrator may perform different functions. Being registered with one does not automatically mean you are registered with the other.
Know the difference between composition and master income
If you release your own recording, you may control both the composition and the master. If another artist records your song, you may continue earning composition royalties even though you do not own that artist’s recording.
Artists who own or control their master recordings may also collect eligible SoundExchange royalties when their music is played on qualifying non-interactive digital services.
SoundExchange is separate from The MLC and separate from most PRO functions. Learn more through the SoundExchange and The MLC resources.
An unclaimed work is invisible in the fight
The organizations and representatives participating in Phono V are arguing over rates that apply to identified compositions and rights holders. If your work is missing from the relevant databases, the system may not know where to send money connected to your song.
That is why registration and accurate ownership information matter even when the legal fight feels far removed from an independent artist’s daily work.
The CRB proceedings will not decide which individual songwriter owns a song. They will establish the framework used to calculate certain royalties. Your job is to make sure your compositions and ownership information are ready for that framework.
What Happens Next
The written direct cases filed on October 5 will be reviewed by the CRB and made available as the proceeding moves forward. A formal hearing is expected in 2027 if the parties do not reach a settlement.
The Board is expected to issue a determination before the new rate period begins, but the process can take time. Previous proceedings have required later corrections when final rates were decided after the covered period had already started.
For now, the current Phono IV framework remains in place through 2027. Phono V proposals are not final rates, and no one can yet say exactly what streaming mechanical royalties will look like from 2028 through 2032.
Radio talking point: The streaming royalty fight is not just about a percentage. It is about who controls the formula, how bundles are counted, and whether a song’s value grows when its audience grows.
For more music-business coverage and artist education from Power JDM The Beat, visit PowerJDM.com or use the Power JDM app.