Songwriters Rejoice: Spotify Appeals WRONG to Prevent Composers from Getting Improved 15.1% Royalty Rate in US

The saga is over.

The Copyright Royalty Board (CRB) upheld its decision today (July 1) to increase the headline rate paid to songwriters in the United States via streaming services between the years 2018 and 2022.

To refresh your memory, songwriters took a big win in January 2018 when the CRB ruled that songwriter/publisher royalties for streaming and other mechanical uses in the US would rise significantly.

That ruling targeted an increase in the overall percentage of U.S. streaming service revenue that Spotify must legally pay to songwriters.

The CRB has decided to increase that percentage from 10.5% until 15.1% over the five years between 2018 and 2022. It was the largest rate increase in CRB history.

Spotify and other companies, including Amazon and Google/Alphabet – but NOT Apple – then appealed the new rates, arguing they were unjustified.

Today the CRB made its final decision – and the 15.1% rate isn’t going anywhere.

The NMPA (National Music Publishers’ Association) lobbied for the 2018 rate hike and subsequently opposed Spotify’s appeal et al

David Israelite, the CEO and chairman of the NMPA, confirmed in the past hour: “Today the [CRB] reconfirmed the 15.1% rise in nominal interest we earned for four long years [ago]confirming that songwriters need and deserve a significant boost from the digital streaming services that benefit from their work.”

However, other than the rise in headline rate, there is mixed news for songwriters.

When the CRB first commented on its new streaming rates in 2018, it ruled that streaming services would either have to pay the songwriters the headline rate, or – if it were a higher amount – the platforms would pay up to 26.2% of their “Total Content Cost” for all records and publications (see “TCC” below).

Importantly, in 2018 the CRB also ruled that this ‘TCC’ figure would be formulated on an ‘unlimited’ amount, meaning that the 26.2% could be inferred from an unlimited number (for example, if a service like Spotify had a monumental year of revenue).

follow Spotify et al’s profession, the CRB has now changed its mind, and the TCC is is capped, limiting the payout songwriters could potentially get from any streaming service.

In addition, the CRB’s latest definition of streaming bundles — covering family plans, telco deals, and other discounts — has reverted to one that is financially beneficial to the streaming services.

That said, the main news tonight is the reconfirmed CRB headline rate of 15.1%

The fact is, that means one thing very clearly:

The streaming services are about to transfer a ton of money to publishers and songwriters to cover the now officially increased CRB rates for the years 2018-2022.

The Digital Media Association (DiMA) is an American trade association that represents all music streaming services that have appealed the CRB’s 2018-2022 tariff decision.

Commenting on today’s CRB announcement, DiMA President and CEO Garrett Levin said, “The streaming services thank the judges for their efforts.

“Today’s decision reflects a significant increase in the royalties that will be paid to publishers. Work to put these new rates into effect will begin in earnest shortly.

“The streaming services are committed to partnering with the MLC and music publishers to facilitate the accurate distribution of royalties.”

[A moment of pause, songwriters, for those sweet, sweet words: “Today’s decision reflects a significant increase in the royalties that will be paid to publishers.” And now we continue with the rest of Mr Levin’s comments.]

“This procedure also reminds us that rate settings cannot – and cannot – take place in a vacuum. Today’s decision comes as the three major label groups — which operate the world’s three largest music publishers — continue to earn the lion’s share of profits within the industry, while reporting consistent double-digit revenue growth from streaming.

“Looking ahead, streaming services believe it is time for all stakeholders – labels, publishers, writers, artists and the services – to engage in extensive discussions to determine the right balance of royalty sharing going forward.”

The 2018-2022 songwriter fee proceeding was fought between the NMPA (on the side of the publishers) and the streaming services in a legal confrontation known as “CRB III.”

All eyes are now on ‘CRB IV’: the yet-to-be-serious procedure that will determine which songwriters in the US get paid from streaming services in the years between 2023 and 2027.

David Israelite of the NMPA today added: “We will fight to increase the TCC, or the percentage of label revenue, which amounts to an insurance policy for songwriters, in the next CRB and we will also fight for stronger terms with regard to bundles.”

Commenting on the conclusion of the CRB III proceeding, following the appeal of the streaming services, Israelite said: “This process has been lengthy and expensive and while we are relieved with the outcome, years of lawsuits to seek a rate hike have taken place. maintain what we’ve been fighting for years, a broken system.

“Now songwriters and music publishers can finally be healed and receive the rightful royalty rates from streaming services that they should have paid years ago. We will ensure that the services refund copyright owners promptly, as required by law.

“We appreciate Pryor-Cashman’s relentless work to secure this result and the voices of all the songwriters and publishers who have supported this mission. As an industry, we are moving forward unitedly as we push for even fairer rates in the next CRB starting this fall.”Music company worldwide

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