Outgoing Sony/ATV chairman Martin Bandier is certainly not phoning it in during his last month on the job — earlier this month he signed a deal that brings Dolly Parton’s entire catalog to the company, and today he sent a letter to the company’s songwriters slamming the decision by Spotify, Amazon, Google and Pandora to appeal the Copyright Royalty Board royalty rates in the U.S., which would see royalties rising some 44%. The appeal, which contests specifics in the CRB’s rules but presumably aims to lower the size of the royalty increase, has been fiercely criticized by the songwriting and publishing community. Variety has obtained Bandier’s letter, which appears below in full.
I am writing to update you about some important developments for songwriters in the U.S. regarding the mechanical royalty rates that the Copyright Royalty Board set last year.
As you may recall, in January 2018 the CRB set a series of new rates that include an increase to the statutory mechanical rate for on-demand streaming from 10.5% of revenue to 15.1% of revenue over the period 2018 to 2022. This was a significant victory for songwriters.
However, the hard-fought win is now under threat as Spotify, Amazon, Google and Pandora have filed notices to appeal these rates. Apple has decided not to appeal. If Spotify and the other streaming services are successful with this appeal, it may result in a reduction in the royalty payments that songwriters will receive from the streaming services. As a result, the National Music Publishers’ Association (NMPA) has announced that it will also file an appeal but will withdraw that appeal if the services do the same.
I am incredibly disappointed that Spotify and the other companies have chosen to attack songwriters by appealing the long-overdue rate increases. The move flies in the face of everything that I have fought for on behalf of songwriters for fair-market rates. Songwriters are unquestionably the most important contributors to the success of the streaming services and deserve the benefits of the new rates that we worked so hard to achieve.
Below are links to some news articles that provide useful information about the issue:
Music Business Worldwide: If Spotify thinks songwriters deserve more money, why is it trying to cut their pay?
While Sony/ATV will work diligently and closely with the NMPA to protect these new rates, there are no more important or effective voices on this issue than those of songwriters themselves. I therefore urge you to make yourselves heard and to speak out against this appeal. At the same time, we will be sure to update you as events develop.
Chairman & CEO
Sony/ATV Music Publishing