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Spotify, Google, Pandora, Amazon Go to U.S. Appeals Court to Overturn Royalty Increase (EXCLUSIVE)

Spotify, Google, Pandora and Amazon have teamed up to appeal a controversial ruling by the U.S. Copyright Royalty Board that, if it goes through, would increase payouts to songwriters by 44%, Variety has learned.

A joint statement from the first three of those companies reads: “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. If left to stand, the CRB’s decision harms both music licensees and copyright owners. Accordingly, we are asking the U.S. Court of Appeals for the D.C. Circuit to review the decision.”

The four companies all filed with the court separately. Sources say that Apple Music is alone among the major streaming services in not planning to appeal — as confirmed by songwriters’ orgs rushing to heap praise on Apple while condemning the seemingly unified front of the other digital companies.

David Israelite, president/CEO of the National Music Publishers’ Association, had previously said that the digital companies would be “declaring war” on the songwriting community if they appealed the royalty increase. He sounded ready for combat after learning the digital services had indeed filed an appeal.

“When the Music Modernization Act became law, there was hope it signaled a new day of improved relations between digital music services and songwriters,” Israelite said in a statement. “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. … No amount of insincere and hollow public relations gestures such as throwing parties or buying billboards of congratulations or naming songwriters ‘geniuses’ can hide the fact that these big tech bullies do not respect or value the songwriters who make their businesses possible.” (The “genius” aside was presumably a dig at Spotify and its Secret Genius Awards, given to writers, producers and engineers.)

The CRB drastically increased royalties for writers in 2018 in a 2-1 decision. Sources close to the situation have pointed to the dissenting judge’s opinion, which argued that the two judges in the majority “create(d) a new combination that nobody had presented.” The companies contend that there was never a chance for the relevant parties to discuss the rates that the judges settled on before the decision was made.

In early February, the CRB decision made last year was officially published, starting a 30-day window in which appeals could be made.

Bart Herbison, executive director of the Nashville Songwriters Association International, joined Israelite in blasting the digital companies’ appeal. “It is unfortunate that Amazon and Spotify decided to file an appeal on the CRB’s decision to pay American songwriters higher digital mechanical royalties,” he said in a statement. “Many songwriters have found it difficult to stay in the profession in the era of streaming music. You cannot feed a family when you earn hundreds of dollars for millions of streams.”

Neither Herbison nor Israelite mentioned Google and Pandora, although it’s not clear if they knew at the time of those statements that those two services were also joining Spotify and Amazon in appealing at the ruling.

Israelite did single out Apple for praise for not participating in an appeal. “We thank Apple Music for accepting the CRB decision and continuing to be a friend to songwriters,” he said. “While Spotify and Amazon surely hope this will play out in a quiet appellate courtroom, every songwriter and every fan of music should stand up and take notice. We will fight with every available resource to protect the CRB’s decision.” The NMPA will file its own notice of appeal.

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