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Copyright Royalty Board Raises Royalty Fees Deemed Unsustainable by Spotify

Streaming platforms must pay back royalties to songwriters and publishers

Despite strong opposition from Spotify and other streaming platforms, the Copyright Royalty Board has confirmed its position to increase the headline rate of royalties paid to US songwriters and publishers. The decision will increase royalties paid from streaming platforms from 10.5 to 15.1 percent for the years between 2018 and 2022.

The CRB ruled in January 2018 that the royalty rates for a songwriter or publisher in the United States for streaming and other platforms would rise for the first time since 2006. Streaming services, such as Alphabet(Google), Amazon, Pandora, and Spotify filed an appeal with the Copyright Royalty Board over the increased royalty rate. The tech giants claimed they have already paid out billions of dollars in royalties and that the increase in royalty payments would make their business models unsustainable. Apple, the second-largest streaming platform, was not involved in this appeal.

The NMPA (National Music Publishers’ Association) originally began to lobby for the 2018 rate increase. Joined In 2021 by the Union of Musicians and Allied Workers, who started the Justice at Spotify campaign to draw attention to low payout rates on Spotify’s platform. In response, Spotify countered with its Loud & Clear campaign to provide transparency on royalty payouts.

Copyright Royalty Board
David Israelite

David Israelite, CEO, and president of the NMPA said “Now, songwriters and music publishers finally can be made whole and receive the rightful royalty rates from streaming services that they should’ve been paid years ago. We will work to ensure that the services quickly backpay copyright owners as they are required by law.”

The CRB did not rule in favor of the publishers on all issues of royalty rates. The three-judge board did not agree to re-evaluate the definition of terms related to bundled sales, including family plans and discounts provided by the streaming services. These issues along with negotiations for the determined rates for the period between 2023 and 2027 will begin later this year.

Copyright Royalty Board
Bart Herbison

Bart Herbison, executive director of the songwriter’s trade group the Nashville Songwriters Assn. International, said: “This verdict represents mixed news. The good news is songwriters received the 15.1% headline rate we won four-and-a-half years ago. The bad news is that the definition of ‘bundled services’ and of total content costs, one of the streaming rate tiers, were not what we wished. We will return our focus to the next CRB proceeding which is already underway. Along with the National Music Publisher’s Association, we are asking for further increases going forward.”

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