The US Copyright Board’s decision to raise the US royalty rate for songwriters and publishers on on-demand subscription streaming services has been welcomed across the publishing biz.
The Copyright Royalty Board (CRB) will hike rates from 10.5% to 15.1% of revenues across a new five-year deal, which will – according to the National Music Publishers’ Association (NMPA), which represented songwriters and publishers alongside the Nashville Songwriters Association International (NSAI) – lead to a 44% increase in revenues. The revenue is split between mechanical and performance royalties.
The CRB also removed the Total Content Cost (TCC) cap and raised the TCC rate, which should help close the gap between record company and publishing earnings on services such as Spotify, Apple Music and Amazon. A late fee was also introduced which will mean services must pay songwriters on time or face penalties.
While the bodies did not secure the per-stream rate they had sought, the landmark decision was still praised across the business.
“We are thrilled the CRB raised rates for songwriters by 43.8% – the biggest rate increase granted in CRB history,” said NMPA president/CEO David Israelite. “Crucially, the decision also allows songwriters to benefit from deals done by record labels in the free market. The ratio of what labels are paid by the services versus what publishers are paid has significantly improved, resulting in the most favourable balance in the history of the industry.
“While an effective ratio of 3.82 to 1 is still not a fair split that we might achieve in a free market,” he added, “It is the best songwriters have ever had under the compulsory licence. The court also decided in our favour regarding a late fee, which will force digital music services to pay songwriters faster or be subject to a significant penalty. The bottom line is this is the best mechanical rate scenario for songwriters in US history, which is critically important as interactive streaming continues to dominate the market.
“The decision represents two years of advocacy regarding how unfairly songwriters are treated under current law and how crucial their contributions are to streaming services. We thank the songwriters who shared their stories with the court and helped illustrate how badly these rate increases are needed. While the court did not grant songwriters a per-stream rate, the increases in overall rates and favourable terms are a huge win for music creators.”
Martin Bandier, chairman/CEO of Sony/ATV Music Publishing, the world’s biggest music publisher, also praised the ruling.
“As the leading music publisher, we believe that overall this is a very positive ruling by the CRB, as it will deliver an unprecedented topline rate increase for songwriters and publishers over the next five years,” said Bandier. “While we are disappointed not to get the per-stream rate that we wanted, the planned rate increases go a long way to fairly compensate our songwriters for the essential contribution they make to streaming's success story.”
Meanwhile, an Association Of Independent Music Publishers’ statement said: “The AIMP is thrilled with today’s announcement of the 44% increase in interactive streaming mechanical rates over the next five years — the biggest increase in the history of the CRB and the compulsory license. The additional benefits obtained from the late fee granted in the decision plus the removal of the Total Content Cost (TCC) cap are sorely needed elements in our path towards equitable compensation for the use of our music in the ever-growing digital economy.”
“Songwriters desperately need and deserve the rate increases resulting from the Copyright Royalty Board (CRB) trial,” said NSAI executive director Bart Herbison. “The CRB was a long and difficult process but songwriters and music publishers together presented a powerful case for higher streaming royalty rates. The NSAI thanks our songwriter witnesses Steve Bogard, Lee Thomas Miller and Liz Rose whose testimony was compelling.”