Streaming Services to Increase Songwriters’ Pay by Nearly 50 Percent

According to Variety, the Copyright Royalty Board issued a ruling on Saturday to boost songwriter rates for streaming services by almost 50 percent over the next five years.

The ruling was in favor of the National Music Publishers’ Association and the Nashville Songwriters’ Association International, and against streaming services like Spotify, Apple Music and Pandora.

NMPA president and CEO David Israelite said of the ruling:

We are thrilled the CRB raised rates for songwriters by 43.8 percent—the biggest rate increase granted in CRB history. 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 favorable balance in the history of the industry.

Under this new ruling, for every $3.82 that record labels get, writers and publishers will get $1. Although these two organizations were fighting for a per-stream rate, which they did not get, streaming services were fighting to reduce rates, so the ruling is viewed as a step in the right direction.

Shockingly, Apple was the only streaming service that advocated for changes that favored songwriters. They conceded that the current royalty rate structure was “too complex” and “economically unsound,” and they advocated for “a single per-play rate that is the same for all services.”

Israelite concluded, “The bottom line is this is the best mechanical rate scenario for songwriters in U.S. history, which is critically important as interactive streaming continues to dominate the market.”

CRB decisions can be challenged at U.S. Court of Appeals for the D.C. Circuit, although this ruling is not likely to challenged.