Digital streaming giants Spotify, Amazon Music, and Pandora are reportedly opting for a reduction in royalty rates for songwriters and publishers. In separate filings made to the Copyright Royalty Board, the trio of DSPs have applied for lower rates than any implemented by the CRB since 2018. Theoretically, these new rates would take effect at the start of the CRB Phonorecords IV period, reflecting the years 2023-2027; however, the rate-setting proceedings are still underway.
The Phonorecords III period headline rates began at 11.4% in 2018, escalating annually to 15.8% in 2022. Notwithstanding, Spotify’s newly proposed rate backtracks to the Phonorecords I and II periods, covering the years 2008 to 2017, equating 10.5% of revenue. Amazon and Pandora are opting for a reduced 10.54% headline rate. David Israelite, chief executive of the National Music Publishers’ Association (NMPA), openly condemned these pre-2018 rate proposals, stating,
“Not only do [streaming services] propose rolling back rates and terms to erase all gains over the last 15 years, but they actually are proposing a structure worse than at any point in the history of interactive streaming.”
In stark opposition, the NMPA’s Phonorecords IV period proposal would increase DSPs’ publisher payments to the greater of 20% of revenue, $0.0015 per stream, 40% of the label’s compensation, or $1.50 per subscriber, calculated on a monthly basis. Taking the middle ground, Apple Music declared its compliance with the CRB’s ongoing Appeals Court remand of the Phonorecords III rates. YouTube announced that it is not seeking lower royalty rates for the Phonorecords IV period.
All of the case details for Phonorecords IV are publicly available on the Copyright Royalty Board’s official website.
Featured image: Akio Kon