Streaming music services. Photo by: John Tekeridis / Pexels.com
Streaming music services. Photo by: John Tekeridis / Pexels.com

Copyright Royalty Board has Helped Raise Rates for Songwriters by 43.8 Percent

A major victory has taken place in the music industry regarding an increase in royalties to be paid tos musicians within streaming music.

In a recent ruling by the Copyright Royalty Board, which has yet to be made public, the court has decided to require streaming services such as Google, Amazon, Apple, Spotify and Pandora to pay 15.1 percent of their revenue to songwriters and music publishers. In the past the rate was close to 10.5 percent.

This will most likely result in an increase in cost that will be pushed along to the consumer. The problem in that is many consumers may opt out of their streaming music subscription with the additional cost.

The National Music Publishers Association (NMPA) and the Nashville Songwriters Association International (NSAI) worked together on a trail to fight for fair compensation for musicians from March and June of 2017. David Israelite, NMPA President and CEO, shared a statement on this recent development.

“We are thrilled the CRB raised rates for songwriters by 43.8% – the biggest rate increase granted in CRB history.” – NMPA President & CEO David Israelite 

He later went on to share additional information on the recent ruling from the Copyright Royalty Board.

“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 favorable terms are a huge win for music creators.” – NMPA President & CEO David Israelite

This is an excellent step forward to balancing the decentralization of music from major labels to independent labels, along with the decentralization of financial inequality within the music industry. I personally would love to see all content producers start getting paid more money for their creative work. This issue goes beyond the music industry, and impacts creative producers in journalism, film, and technology.

Several of the musicians we work with have complained about the compensation that streaming services have provided in the past. In April 2017, we reported the following on Spotify’s biggest expense:

‘Its biggest cost was the amount it paid in royalties. Spotify says that it pays out about 70% of revenue as music royalties, but in 2015 it had to pay 1.63 billion Euros, 83.6% of revenue.’

With this recent law passing, it may heavily influence the way Spotify will operate moving forward. The company recently went public on the New York Stock exchange earlier this year. This recent ruling will take place over the next five years, so it may not have a direct impact on the company.

Nashville Songwriters Association International (NSAI) Executive Director Bart Herbison made the following statement regarding the compensation with royalties and musicians:

“Songwriters desperately need and deserve the rate increases resulting from the Copyright Royalty Board (CRB) trial.  The CRB was a long and difficult process but songwriters and music publishers together presented a powerful case for higher streaming royalty rates. The Nashville Songwriters Association International (NSAI) thanks our songwriter witnesses Steve Bogard, Lee Thomas Miller and Liz Rose whose testimony was compelling.” – Bart Herbison, Executive Director at NSAI

The video below is close to being three years old, but it still relates the importance of paying musicians a fair wage for their content. Watch the PBS Newshour YouTube video to find out more on this topic.