Washington DC
05 February 2018
Reporter: Barney Dixon

CRB issues royalty rate hike for music streaming services

The Copyright Royalty Board (CRB) has ruled to increase royalty payments to songwriters and music publishers from music streaming services by nearly 44 percent.

According to National Music Publishers Association (NMPA) president David Israelite, the rate hike is the “biggest rate increase granted in CRB history”.

The new rates will be in effect from 2018 to 2022. Services that offer interactive streaming and limited downloads, such as Amazon, Apple, Google and Spotify, will be affected.

The ruling increases the overall percentage of revenue paid to songwriters from 10.5 percent to 15.1 percent.

Israelite commented: “We are thrilled the CRB raised rates for songwriters by 43.8 percent.”

He said: “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.”

Israelite added: “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.”

According to the NMPA, the board’s decision is the direct result of a lawsuit from the NMPA and the Nashville Songwriters Association against Google, Amazon, Spotify and Pandora.

Frank Scibilia, partner at law firm Pryor Cashman, which represented NMPA and NSAI in the case, commented: “At trial, we had a dual focus. First, we wanted to begin correcting the unfairly low share of royalties being paid to the songwriters who create the musical works that are the very foundation of music streaming services, and second, to protect our clients against business strategies employed by the interactive streaming services that have had the effect of reducing the reportable revenues on which our clients’ royalties have been based.”

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