Songwriters expected to receive increased royalties despite plea from Spotify and other streaming platforms

The Copyright Royalty Board (CRB) has reaffirmed its intention to increase the overall rate of royalties paid to US songwriters and publishers from streaming platforms from 10.5% to 15.1%, for the years between 2018 and 2022 , despite continued opposition from Spotify and other streaming platforms. .

In January 2018, the CRB ruled that royalty rates for a songwriter or publisher in the United States for streaming and other platforms would increase for the first time since 2006. Spotify and other streaming platforms, including Google/Alphabet, Amazon, and Pandora, legally appealed the rate increase and argued that they had already paid billions in royalties and that the royalty increase would make their business models unsustainable. Apple, the second-largest streaming platform, was not involved in the appeal.

“The streaming services thank the judges for their efforts,” said Garrett Levin, CEO and president of the Digital Media Association in a statement to American songwriter, following the CRB’s decision to set the royalty rates that digital streaming services must pay music publishers for the reproduction and distribution rights to musical works. “Today’s decision reflects a significant increase in royalties that will be paid to publishers. Work to give effect to these new tariffs will soon begin in earnest. Streaming services have pledged to work with the MLC (Mechanical Licensing Collective) and music publishing companies to facilitate accurate distribution of royalties.

Levin added: “This procedure is also a reminder that rate settings are not and cannot be done in a vacuum. Today’s decision comes as the three major label groups, which operate the world’s three largest music publishers, continue to carve out the lion’s share of industry profits while recording steady revenue growth. double-digit revenue from streaming. Looking ahead, streaming services believe it’s time for all stakeholders – labels, publishers, writers, artists and services – to engage in in-depth discussions to determine the right balance of royalty sharing going forward. .

An earlier proposal suggesting the rate increase from 10.5 to 15.1% over the five-year period was reviewed by a three-judge board, after streaming platforms asked for a reassessment in terms of bundled sales, including family plans and other discounts, and income cap tag.

“This verdict represents mixed news,” Bart Herbison, CEO of the Nashville Songwriters Association International, said in a statement. “The good news is that songwriters have received the 15.1% rate we won four and a half years ago. The bad news is that the definition of bundled services and total content costs, the one of the streaming price levels, was not what we wanted.

Herbison added: “We will be focusing again on the next CRB procedure which is already underway. Together with the National Music Publisher’s Association (NMPA), we are asking for further increases in the future.

In 2021, the Musicians and Allied Workers Union launched the Justice at Spotify campaign to draw attention to the platform’s low payout rates. Spotify responded by launching its Loud & Clear web portal to provide payment transparency.

“Today the [CRB] reaffirmed the 15.1% overall rate increase that we have won for four long years [ago], confirming that songwriters need and deserve a significant increase in digital streaming services that profit from their work,” said NMPA CEO and President David Israelite. “Now songwriters and music publishers can finally be cured and receive the legitimate royalty rates from streaming services that they should have received years ago. We will ensure that the Services promptly reimburse copyright owners as required by law. »

A trial for CRB IV, which will determine rates for the five-year period between 2023 and 2027, will begin later this year.

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