Songwriters Score Historic Win in Dispute Over Streaming Royalties
In a landmark decision, the federal Copyright Royalty Board has dramatically altered the formulas by which streaming companies pay out revenue to American songwriters.
In a new decision handed down Saturday (Jan. 27), the CRB ruled that streaming companies will pay songwriters and publishers 15.1 percent of their revenue. The previous rate was 10.5 percent.
"We are thrilled the CRB raised rates for songwriters by 43.8 percent — the biggest rate increase granted in CRB history," National Music Publishers Association President and CEO David Israelite says (quote via the Tennessean).
The rates were decided at a hearing that found songwriters and publishers on one side of the issue, with streaming companies including Spotify, Apple Music, Google, Pandora and Amazon on the other side. The dispute over setting new rates has dragged on for more than a year.
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The CRB also gave additional relief to professional songwriters, who have seen their ranks decimated by anywhere from 75 to 90 percent over the last 15 years in response to dwindling revenue from song publishing in the digital age due to issues around piracy, the emphasis on single songs and streaming rates. The Court Royalty Board also lifted the total content cost cap limiting how much money the streaming companies have to pay to license songs and altered the formula for calculating the royalties streaming companies pay songwriters. Under the new standards, writers will receive either 15.1 percent of the total revenue or around 26 percent of the revenue paid out to artists and record labels from streaming.
The CRB's new guidelines also implement a first-ever late fee of around 18 percent annually that streaming companies have to pay on any royalty revenue that's paid late.
Songwriter advocates are hopeful the decision will build more consensus for passing the proposed Music Modernization Act, which is aimed at overhauling the digital mechanical licensing process to provide higher royalty rates for songwriters and music publishers. Writers and publishers have argued for years that the existing process unfairly slants the marketplace and does not pay fairly for digital music.
On Friday (Jan. 26), the National Association of Broadcasters announced it is dropping its opposition to the legislation, one of the last factors standing in the way.
"This has been the most exciting 24 hours, certainly in my 13 years working in this industry," Israelite states.