Digital service providers Spotify, Apple Music, Google and Pandora have filed paperwork stating what they believe should be songwriters’ royalty rates for the years 2023 to 2027.
The Copyright Act states that every five years Copyright Royalty Judges oversee discussions to determine what streaming services like Spotify and Apple Music pay as a mechanical royalty rate to songwriters and publishers. These platforms are known for their incredibly low payout rates and “exploitative practices” when it comes to paying music creators.
The National Music Publishers Association (NMPA) has been campaigning for higher mechanical royalty rates for music publishers and songwriters. The organization’s president and CEO, David Israelite, said these proposed rates have “significant implications for songwriters and music publishers.”
He added that songwriters and publishers should take note of these filings as it shows how little these streaming giants care about the artists and songwriters who keep their platforms afloat.
“Amazon, Spotify, Apple, Pandora, and Google have proposed the lowest royalty rates in history,” Israelite said Music company worldwide. “Not only are they proposing to roll back rates and terms to wipe out all the gains made in the past 15 years, but they are even proposing a structure that is worse than ever in the history of interactive streaming.”
The NMPA has proposed a larger formula that is more beneficial to songwriters and publishers:
- 20% percentage of sales; or
- 40% of what record labels and artists receive; or
- $1.50 per subscriber; or
- $0.0015 per game
In January 2018, songwriters urged Congress to pass the Music Modernization Act, which President Trump signed in October 2018.
This was a significant step forward in the digital music era and allowed songwriters to receive royalties on songs prior to 1972. It also designated funds for music producers and updated licenses for royalty rules and streaming services so they could transfer payments more efficiently.
“[Music creators] have been treated very unfairly,” Trump said after signing the Music Modernization Act. “They will no longer be treated unfairly.”
Unfortunately, however, songwriters and musicians have continued to compete with the major corporate streaming platforms to achieve equal pay.
The Music Modernization Act also created the Mechanical Licensing Collective (MLC) to collect and distribute royalty payments. “From January 1, 2021, songwriters and music publishers must register with the MLC through the online claims portal to receive royalty payments under the new general license,” the Copyright.gov website reads.
Songwriters and music publishers are in an ongoing legal battle with the Copyright Royalty Board (CRB). In January 2018, the CRB ruled that mechanical usage and streaming royalties would increase by 44% between 2018 and 2022.
Revenue for songwriters rose from 10.5% to 15.1% between 2018 and 2022, marking the largest rate increase the CRB has ever approved.
The CRB then ratified their decision after the final songwriter rates and terms were published. Spotify, Google, Amazon and Pandora opposed the CRB’s ruling in March 2019. The music advocacy group Songwriters of North America (SONA), which was co-founded by Kay Hanley, Michelle Lewis and entertainment lawyer powerhouse Dina LaPolt, reportedly condemned their decision.
“There are many fronts in the war for higher and fairer rates, but we hope the entire music industry will unite to support our efforts in these crucial cases as they will dictate the future of the streaming economy,” the Israelite said. . Music company worldwide.