NMPA Says Streaming Services Are Demanding ‘The Lowest Royalty Rates in History’ — Let the Negotiations Begin

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Washington, D.C.’s James Madison Memorial Building, which houses the U.S. Copyright Office.

Ahead of the Copyright Royalty Board’s mechanical-rate determination for 2023 to 2027, National Music Publishers’ Association (NMPA) president and CEO David Israelite has issued the first salvo, claiming that streaming music services are demanding “the lowest royalty rates in history.”

David Israelite just recently took to social media to levy the firmly worded criticism concerning streaming services’ mechanical-rate proposal, having authored a number of different messages on the subject during the last week. On October 13th, for instance, Israelite informed his Instagram followers that “Spotify, Amazon, Apple, YouTube & Pandora will tell a court [the three-judge CRB] what they think they should pay songwriters for the next five years.” And yesterday, Israelite indicated that the streaming services had “submitted their proposal” (the filings remain sealed but Digital Music News has confirmed that they have been submitted).

As initially mentioned, Israelite has fired back against said proposals, relaying on both Instagram and Twitter: “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,” continues the nearly 17-year NMPA head’s post, “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,” finishes Israelite’s approximately 140-word-long message.

Keeping the streaming services’ reported demands in mind – along with Israelite’s remarks and the highlighted (ongoing) battle over 2018’s mechanical-rate hike – the National Music Publishers’ Association in a proposal of its own is reportedly looking to increase DSPs’ publisher payments to 20 percent of revenue in 2023-2027, according to sources with knowledge of the matter.

It also bears noting that the NMPA’s reported mechanical-rate proposal likewise encompasses possible compensation in the amount of $0.0015 per play, 40 percent of the payments forwarded to record labels/master-recording owners, or $1.50 per subscriber – whichever is highest (including the 20 percent of revenue), calculated monthly, according to sources.

Of course, streaming services will undoubtedly argue that they already pay billions of dollars (and, in turn, a substantial portion of their revenue) to creators. Then there’s the sticky issue of how much more is being paid to record labels — and Israelite’s efforts to play down any conflicts-of-interest involved in claiming to fight for songwriters while also representing major label-owned mega-publishers like Sony Music Publishing.

More broadly, it’ll be worth closely monitoring the high-stakes negotiations over mechanical royalties moving forward, and it should be highlighted in conclusion that the CRB as well as major publishers themselves have faced criticism and calls for transparency from songwriters and associated organizations as of late.

10 Responses

  1. The Real Legend

    More class warfare like usual.

    The streaming services want as much to profit as possible to justify their existence to Wall Street.

    The musicians are fighting for crumbs in order to continue their extremely vulnerable careers.

    • Jerry Mander

      I’d rather have crumbs than no crumbs. Lots of crumbs equals a piece of bread. A few pieces of bread equals a loaf. You see where this is going.

  2. Johnny

    The fans abandoned the musicians. Free music is here to stay. 75% of Pro musicians quitting the business tells you the true story. Crumbs will never become a loaf of bread on Spotify

    • Blobbo

      Fans are the stupidest ever, but it’s not really their fault. Their educational systems are as bad as the music they’ve been fed since birth.

      ‘Pro’ musicians will always find a way. If you can’t stand the heat, then get out of the kitchen. Great music will be discovered eventually, though the discovery may not be notable. These are the breaks. Great creatives have multiple approaches to making a living. It’s harder to get paid for recordings now, but they are far cheaper to make and distribution is essentially free. You just need to learn how to record and mix, which takes a few years, but manageable for the committed.

      The bigger question is why in such an open system with such advanced tech, is so little extra great quality music being made? (there is adequately good, but not much great). It can’t be desire or access. I’m convinced the answer is mentoring. Not enough young artists are meeting producers and engineers who know their head from their ass. It’s also that so many people are taking the short cuts, and not getting proficient not just at instruments, but at songwriting. Then again, there are tons of great new guitarists and singers, but for some reason, people don’t write that well (with a few exceptions). Another problem is people display great talent, everyone goes oooo, and then their career falls off a cliff because once again, no mentoring, no commitment to see it through from a mentor (generally a self-interested label).

      Then again, maybe it is just music influences. Not enough people starting into the blues and going psychedelic. You can laugh and say that’s just the 60s, but it was the template for everything from the 60s to the 00s. You either start in the blues or irish folk ballads and then you go as weird as possible and drag it back to listenable. Too many writers in the modern age are trying to recreate a popular cliche. I hear so much of it. They’re not finding their own sound because they are pandering out the gate. This has always been a problem, but from the 60s – early 00s, people expected bands to be somewhat original, or at least they rewarded it.

      Now people seem to have gone back to a 50s-70s R&B torch song tradition, except with sh*tty drum machine, programmed bass, shit vst keys and autotune. It’s pretty ridiculous. Also, people that are originals like Charli XCX are booted by their 30s in favor of the next teen diva. Olivia Rodrigo wrote a great song on a piano, but they’ll f her up soon, with some overproduced garbage sold by some major label slopmeister telling her ‘this is how you stay in the spotlight’.

      Too much payola, crooks all run the top labels. That’s not new. What’s new is they want 99% of music to be garbage they make popular, not something good.

  3. Charlie

    Never? Really? Wrong again. Most of these supposed pro musicians are not pros. Most music pushed online is by people who believe they have talent, but they don’t, and it’s crap.

  4. Israel Lite

    What this boils down to is that all the boomers and old-timers are still whining about not being able to write filler tracks for $18 CDs and buy a 4th or 5th vacation house off those royalties.

    It has nothing to do with Spotify or even talent. It has everything to do with these boomers getting their cheese moved. Guess you shouldn’t have snorted all that cocaine back in the day, and now you need a liver transplant.

    • Sellout-ennial

      Says generation cheap, broke and untalented, white rapping and moaning through autotune to create the most god awful music any group of people has ever publicly released ever.

      The exceptions are the ones who are actual musicians, and not bullshit programmers, and no, I don’t hate electronic music.

  5. Jorge

    0.000002% chance of success in the music business and how many even get to buy their own house?! Amazing that the fans are all so brainwashed by the media

  6. Blobbo

    Spotify is majority owned by the major labels. F them and F Spotify. Between Bandcamp, Apple and Soundcloud, physical releases and shows, there is NO REAL REASON TO GET ON SPOTIFY! They pay indies leftovers anyway. it’s not even based on how many plays. It’s the last slop juice in the trough after the label hogs have swilled out their meals. An indie is basically on there for free, undermining other outlets. F the fans who don’t bother to research bands they actually care about.

    Plus, Spotify does nothing about piracy and phony frauds riding off of accounts. Tell me I’m wrong, it’s fine, but I hate that bald Swedish b*tch and his company can go F itself. Ugly ass graphic dictatorship you have to live within Spotify and Apple, which look identical. I hate the banners, I hate the font, I hate the phony baloney cutesy ass photography.

    It’s fucking embarassing to have music look like it does on their sites. I hope to never work with them.