Streaming Services vs Songwriters
The reproduction of songs in the US is covered by a compulsory licence, which means songwriters and music publishers are obliged to allow labels and digital services to make copies of their work at industry-wide rates. Those rates are set by the Copyright Royalty Board (CRB) which has long been criticised in the music community for under-valuing music rights. Though this time around, the music industry has generally welcomed the CRB’s decision for mechanical royalty rates moving forward.
In January, the Copyright Royalty Board outlined plans for the new royalty rates structure. The new rates were first published a year ago and include a top line 44% increase in the revenue share rate being paid by the streaming services. Under this ruling, streaming services will be required to pay songwriters and publishers 15.1% of revenue, up from 10.5% by 2022.
So far Google, Amazon, Spotify and Pandora have all individually put in an appeal to the US Court of Appeal regarding the new CRB ruling.
“The Copyright Royalty Board (CRB), in a split decision, recently issued the U.S. mechanical statutory rates in a manner that raises serious procedural and substantive concerns,” – Spotify, Pandora, and Google emailed Digital Music News in a joint statement.
A lengthy statement came from the president of the National Music Publishers Associations director as his response to the challenges put forward by the 4 major streaming services.
“When the Music Modernization Act became law, there was hope it signalled a new day of improved relations between digital music services and songwriters. That hope was snuffed out today when Spotify and Amazon decided to sue songwriters in a shameful attempt to cut their payments by nearly one-third,”
David Israelite, NMPA
Image Source: NMPA
Apple music is the only major streaming service who currently haven’t appealed the new ruling, gaining much praise from the songwriters and publishers as can be seen in David’s continued statement:
“We thank Apple Music for accepting the CRB decision and continuing to be a friend to songwriters”.
It’s an interesting move by Apple not to partner with their digital counterparts on this matter, but perhaps a promising sign for publishers and songwriters.
Are the streaming services being selfish and ‘suing songwriters’ or are these increases in revenue split simply too drastic for the streaming services to continue to operate?
Let us know your thoughts in the comments below.
