U.S. Copyright Royalty Board Officially Submits a 44% Songwriter Streaming Royalty Increase — Publishers Say a Spotify Challenge Would be ‘Declaring War’

The US Copyright Office, Washington, D.C.

The US Copyright Office, Washington, D.C.

The U.S. Copyright Royalty Board (CRB) has officially published a significant streaming royalty rate increase for songwriters and publishers.  Will it be challenged?

Last year, songwriters and publishers scored a major increase in streaming royalty rates.  Now, that 44% rate bump has been officially published by the U.S. Copyright Royalty Board, though streaming services have 30 days to challenge the increase.

Ahead of any challenge, major publishers are issuing stern warnings to Spotify, Amazon, and other streaming music services.

“The Copyright Royalty Board publisher today the Final Rates and terms for songwriters for mechanical royalties (Decision was announced a year ago),” National Music Publishers’ Association (NMPA) president David Israelite declared.

“NMPA and NSAI [Nashville Songwriters Association International] fought hard to increase songwriter royalties by 44%+.  The digital music companies now have 30 days to appeal that ruling, and in effect declare war on songwriters.”

The obvious next question is whether any of the streaming platforms will appeal the ruling.

Israelite’s aggressive tactic is a pre-battle strike, with threats of a ‘war’ potentially cooling any plans to challenge the ruling.  Whether that works is anyone’s guess: earlier, mega-platforms like Spotify, Pandora, Sirius XM and others haven’t been shy about challenging royalty rates and terms they deem unfair, especially when investors stand to lose money.

Already, Apple has indicated that it won’t issue a challenge, according to Israelite.  That’s great news for publishers and songwriters, though it may also be a competitive tactic by Apple to outgun its competitors by forcing higher royalties on everyone.

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That’s an interesting war of attrition, with Apple employing a monstrous war chest to achieve dominance over cash-stressed companies like Spotify.

The net result, of course, is great for songwriters and publishers.  Though maybe Spotify isn’t so eager to play along — let’s see.

“We will know soon whether some digital companies want to be partners or want to attack the Songwriters who make their businesses possible,” Israelite continued.   “Stay tuned.”

The warring words could work, and effectively protect the royalty gains in question.  But Israelite’s pitbull approach may also backfire.  Just recently, Israelite was accused of tortious business interference by principles of the American Mechanical Licensing Collective (AMLC), a group competing with an NMPA-backed coalition to fulfill the duties the the Music Modernization Act’s Mechanical Licensing Collective (MLC).

According to the allegations, Israelite directly threatened AMLC board members to quit their posts, while promising damage to their careers if they didn’t.  Within 48 hours of the AMLC’s announcement, two prominent members — George Howard and Larry Mestel of Primary Wave Media — had mysteriously resigned.

Israelite declined to respond to the allegations.

Separately, the NMPA is leading the charge on an ‘industry consensus’ MLC proposal, one stacked with serious support from major publishers and several other sectors.  That may satisfy the MMA’s directive that the selected MLC body enjoy ‘majority’ support from the music industry, though the AMLC is zealously attacking the NMPA and major publishers for their inability (or refusal) to properly remunerate independent publishers and songwriters.

Meanwhile, the U.S. Government itself is sputtering along, with another crippling shutdown possible if Donald Trump doesn’t get his near-$6 billion funding for a border wall.  Exactly how that would impact the 30-day appeal window is anyone’s guess, though it certainly won’t speed things along.

15 Responses

  1. Avatar
    Anonymous

    If there is an appeal, I don’t think it would necessarily be about the rates themselves, but perhaps some other aspect of the 100+ page ruling. The problem is that the people writing and negotiating this stuff aren’t involved with the practical realities of the actual administration, and there may be unforeseen consequences that neither side has put much thought into until now. If so, an appeal could address such matters, which could then be clarified, negotiated, and resolved amicably. I don’t think it’s constructive to characterize any appeal as a declaration of war.

    • Avatar
      Murrow

      “…there may be unforeseen consequences that neither side has put much thought into until now.”

      otherwise known as the digital music industry…

  2. Avatar
    Marcus Right

    War? LMFAO. These leftist lunatics have no idea what WAR is.

    A 44% increase is, however, a major F-you to the consumer audience.

    • Avatar
      ALLAN CASWELL

      No … it’s a balancing of a situation where consumers pay very little and creators are driven to the wall.

    • Avatar
      Anonymous

      You sound so ignorant. How is it that artists getting their fair share is a F-you to the consumer audience? This shouldn’t affect the consumer at all, unless the streaming companies do something devilish like increase the subscription costs to compensate. Either way this has nothing to do with the artists and we should be payed what we are owed.

    • Avatar
      Lauren Blaien

      Left or Right, it doesn’t matter. Songwriters need to be paid for their creations just like authors and film creators. I don’t hear anyone bitching about paying $10 and up to see a movie that lasts an hour an a half. To download a song, it’s still only about a dollar. It was $1 in 1965 to buy a “single” that had two songs on it. Think it still costs the same to live??
      To pay a little more for streaming means that the songwriter can still write instead of going out to get a mechanic or a waitstaff job. I think that people think that you hear a song, “in the air” that it should be free.
      When you think of the years of practice, the life experience, blood, sweat and tears it takes to write a real and decent song and the costs of recording and releasing it, the low cost that the public have to pay for music is ridiculous.
      You have to vote with your dollar. If you love the music as much as you say you do, then throw the writer/performer a bone so that they can come back with more next year. If you don’t, you might meet them while he/she is parking cars in the lot down the street from Music Row.

      • Avatar
        Lauren Blaine

        (Name correction)

        Left or Right, it doesn’t matter. Songwriters need to be paid for their creations just like authors and film creators. I don’t hear anyone bitching about paying $10 and up to see a movie that lasts an hour an a half. To download a song, it’s still only about a dollar. It was $1 in 1965 to buy a “single” that had two songs on it. Think it still costs the same to live??
        To pay a little more for streaming means that the songwriter can still write instead of going out to get a mechanic or a waitstaff job. I think that people think that you hear a song, “in the air” that it should be free.
        When you think of the years of practice, the life experience, blood, sweat and tears it takes to write a real and decent song and the costs of recording and releasing it, the low cost that the public have to pay for music is ridiculous.
        You have to vote with your dollar. If you love the music as much as you say you do, then throw the writer/performer a bone so that they can come back with more next year. If you don’t, you might meet them while he/she is parking cars in the lot down the street from Music Row.

    • Avatar
      Blobbo

      F the consumer. They’ve had a free ride ever since Napster. Maybe if all the landlords weren’t soaking the planet, the consumer would have some money to spend.

  3. Avatar
    Anonymous

    The musicians / writers / publishers / have been forced to have Go-Fund-Me pages to try and buy a burger while their products are making shareholders wealthy. Certainly, Bach / Mozart / Lennon are rollin’ over .. (not in a good way)

  4. Avatar
    Anonymous

    The CRB is partially and completely responsible for the issues we face currently. They were right there complying with Governments infiltrating the music industry in 2003 when Broadcast and Transmission were removed from the legal definition of Streaming, thereby removing performance royalties and leaving our commerce subject to a “Sale” of fractions of a penny.. Either Paul is stupid as shit, or he’s just a side line instigator who can’t formulate thought of his own to shed light on moving forward and making positive change in the music industry.. Paul is also an obstinate ass who has missed the rock’n roll story entirely. Perhaps he’s just a simple peeon who only reports on things he has superficial attachments to. No teeth, no controversy, no statement, just coverage of the same bullshit that got us here in the first place. Grow some balls Paul and cover a story that will turn this industry on it’s EAR….. stop placating the PRO’s and the CRB as though they actually serve the interests of the creators. They are professional money launderers…..do a fucking story on the truth…for once. MORON

  5. Avatar
    MERHQ

    “cash-stressed companies like Spotify”.

    Musicians and publishers should unionize and take a stand against these technology companies which have outrun the Wixen lawsuit and other efforts to right this disgusting payment structure and broken system. #demandapennyperstream

    • Avatar
      Blobbo

      Tidal’s been the only attempt so far by musicians. Why they couldn’t beat a bald swede who can’t play shit I do not understand. The industry didn’t defend itself.