Publishers Ask Copyright Royalty Board for Major Streaming Increase, DSPs Want ‘Smallest Rates in History,’ Fiery Words Ensue

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The streaming rates determined by the Copyright Royalty Board every five years are an always-contentious situation pitting the major streaming services against music publishers, and the battle over the rates between 2023 and 2027 is no exception. That battle heated up this week when Spotify, Apple, Amazon, Pandora and Google filed documents with the CRB this week suggesting rates for the forthcoming period, provoking howls of outrage from the National Music Publishers Association, which has proposed a much higher rate.

While specifics have not yet been announced, NMPA president/CEO David Israelite calls them “the lowest royalty rates in history.” Billboard and Music Business Worldwide report that the NMPA is seeking a 32.4% increase, to 20% of each DSP’s revenue for the full five-year term; or 40% of what record labels and artists receive; or $1.50 per subscriber; or $0.0015 per play.

Per the Copyright Act, the CRB holds proceedings every five years to determine the mechanical royalty rates paid by streaming services to songwriters and publishers.

In a statement to Variety, Israelite said, “We now know definitively what the digital streaming services think of the songwriters that make their businesses possible. Amazon, Spotify, Apple, Pandora and Google have proposed the lowest royalty rates in history. Not only do they propose rolling back rates and terms to erase all gains over the last 15 years, but they actually are proposing a structure worse than at any point in the history of interactive streaming.

“It is disappointing, but not surprising, given how they have treated songwriters over the years, including their continued assault on the rate victory that was achieved in 2018 which they are still appealing four years later. The next time you see a billboard, paid ad, or token gesture from a streaming service claiming to value songwriters, remember that their actions speak louder than any hollow gestures. This fight has just begun.”

On the other hand, Garrett Levin, president/CEO of the Digital Media Association, said in a statement: “The headlines each and every day demonstrate how much streaming and streaming services continue to drive ever-growing revenues for publishers and performing rights organizations, massive investments in publishing catalogs, and innovative tools and features that connect songwriters to fans in ways never possible before.

“This CRB proceeding, like any other, does not happen in a vacuum. ‘Mechanical’ licensing is just one of the multiple, necessary licenses for streaming services within a single segment of publisher and songwriter revenue streams. And that itself is one segment of the complete digital music economy. The current proceeding comes at a time of sky-high valuations for all forms of music rights, more creators delivering more music to fans at the push of a button, and an increasingly vocal conversation throughout the world about the most equitable allocation of streaming royalties between recordings and songs. That is the broader lens through which this proceeding – and the interconnected nature of today’s music industry — should be considered.”

In January 2018, the CRB decreed a 44% increase in streaming rates for 2018-2022 — from 10.5% to 15.11% of total revenue — a major victory for songwriters and the NMPA. Not surprisingly the major DSPs disputed the ruling when it was ratified the following year, which songwriter and publisher groups equated to “suing songwriters.” Spotify and others insisted that they were doing no such thing; publishers and others responded, and here we go again.