In Music, the "Buy" Becomes the "Listen"

The transformation of the recorded music industry to a performance-based business can be seen in the mechanical royalty rate decision issued by the Copyright Royalty Board on October 2.
Since the early 20th Century "mechanical" royalties have flowed to music publishers based on "units" of product "sold." Nowadays, "units" are becoming digital, and in the case of streaming and subscription services, are simply accessed and "listened to" as opposed to being purchased and owned.
For these reasons, the Harry Fox Agency (the principal collection agency for mechanical royalties) is starting to look more and more like its PRO cousins -- ASCAP, BMI and SESAC -- who perform the same function with respect to public performance royalties.
HFA has released a chart reflecting its mechanical royalty calculations under the CRB decision for the use of musical works in connection with interactive streams and limited download services. In these scenarios HFA calculates fees based on a percentage of a service's revenue, then subtracts the PRO royalties paid by the service. Based on that number, HFA then calculates "the total number of plays of all musical works" to determine a "per play allocation," and multiplies the allocation by the "number of plays for each musical work," arriving at the royalty owed for a particular song.
Is HFA equipped to draw data and determine "plays" for each of the millions of musical works it represents? Time will tell, but one thing is clear: Increasingly, the future of music is in the "listen," not the "buy."