Spotify, Amazon to Argue Against Songwriter Rate Hike in Court of Appeals

US Capitol

On Tuesday, an appeal by Amazon, Google, Pandora and Spotify that seeks to overturn the Copyright Royalty Board’s 2018 decision to raise by 44% the royalties paid to songwriters by streaming services will come before the U.S. Court of Appeals. Attorneys for Amazon and Spotify will make their cases Tuesday (the four companies filed their appeals separately); notable by its absence from the appeal is Apple Music, the world’s second-largest streaming service.

Tensions have been high since the appeal was made last March: The publishing community is understandably up in arms over this threat to a hard-won rate increase, while the streaming giants insist that they are not “suing songwriters,” which is how the appeal is often characterized.

To be technically accurate, they’re not: Rather, they’re suing in part to pay songwriters less than the Copyright Royalty Board decided they should, and, all moral considerations aside, that is an argument they are legally entitled to make. However, songwriters and the publishing community have lambasted the streaming services over the move.

In a statement to Variety Monday, National Music Publishers’ Association president/CEO David Israelite said in part, “This week a historic trial that affects every songwriter begins in Washington, D.C. Two of the largest streaming services in the world are challenging a ruling that gave songwriters a 44%+ raise. While this raise was a step forward, it still fell far short of what songwriters deserve, and yet Spotify and Amazon have found this modest increase too much to pay to the very people on whom they depend. All creators and artists should be watching what happens in this unprecedented appeal.”

Reps for Amazon and Spotify either declined or did not immediately respond to Variety‘s requests for comment.

While four large streaming services have appealed the ruling, Spotify has borne the brunt of the criticism, largely due to its highly publicized overtures to the songwriting community, which include its “Secret Genius” awards — designed to recognize songwriters, producers and others who work behind the scenes — its recent launch of “Songwriter Pages,” and more.

A group of songwriters, including Nile Rodgers, Kenneth “Babyface” Edmonds, Greg Kurstin, Frank Dukes, Benj Pasel and Justin Paul, Teddy Geiger and more, wrote an open letter to Spotify on the matter last April.

“Now, we can see the real reason for your songwriter outreach. You have used us and tried to divide us but we stand together,” the letter reads in part. “Our fight is for all songwriters: those struggling to build their career, those in the middle class and those few who have reached your Secret Genius level. But none of us are ‘secret!’ WE all create the ONE thing you sell… songs. Do the right thing and drop your appeal of the Copyright Royalty Board rate determination.”

Days after the appeal was made public, Spotify posted a notice on its website stating its case, which says that it appealed in order “to clarify elements of the CRB ruling,” and that believes “songwriters deserve to be paid more” (sidestepping the issue of how much more it believes they should be paid). In that statement, the company says there are “flaws” in the CRB rate structure and notes, “We are supportive of US effective rates rising to 15% between now and 2022 provided they cover the right scope of publishing rights. But the CRB’s 15% rate doesn’t account for all these rights.”

Israelite, who has lambasted the appeal multiple times in the past year, responded to Spotify’s post in a statement to Variety: “This statement is one giant lie. The CRB ordered a rate increase for songwriters. Spotify is against it. It really is that simple.”