Streaming mechanical royalties currently create unnecessary complexity in music licensing, with songwriters suffering the most under the current system. Here's a detailed analysis of potential solutions:

The Current Problem:

• Major publishers control 70% of revenue-earning songs in the US
• Song rights revenue is capped at 20% of streaming revenue
• Publishers secure payments through label relationships, while songwriters struggle
• Direct licensing of mechanicals isn't a viable solution

Two Proposed Solutions:

1. Eliminate Streaming Mechanical Rights:

• Classify streaming as solely a "public performance" right
• Let PROs (ASCAP, BMI, SESAC) handle all negotiations and distributions
• Enable direct payments to songwriters
• Remove complexity of Section 115's compulsory license

2. Unified Arbitration System:

• 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

Benefits of Reform:

• Streamlined licensing process
• Direct payment flow to songwriters
• More efficient royalty distribution
• Reduced administrative costs
• Better negotiating power for creators

The role of PROs (particularly ASCAP and BMI) would become more crucial in either scenario, as they have the infrastructure and experience to handle negotiations and distributions effectively. These organizations are uniquely positioned to represent songwriter interests while maintaining efficient payment systems.

These reforms could significantly improve the current streaming royalty landscape, making it more equitable for songwriters while maintaining system efficiency. The key is choosing a path that balances all stakeholders' interests while prioritizing creator compensation.

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