It’s time to reject the “penny rate” model for mechanical royalties altogether, in favor of a percentage of revenue. The penny rate structure has been “frozen” since 1909 and the rates have simply been increased periodically, through processes seemingly disconnected from the marketplace. Tying future increases to inflation sets the penny rate on a path to being even much more detached from reality.
Source: Time to Modernize the Entire Mechanical Licensing System (Guest Column)