U.S. songwriters association blasts ‘shameless,’ ‘brazen’ Spotify and Amazon as royalties hike hits hurdle
America’s songwriters lobby body has pledged to fight on after a federal appeal court pulled the handbrake on a near-50% hike in digital streaming royalties.
This week, the D.C. Circuit Court of Appeals made public its ruling relating to a 2018 decision from the Copyright Royalty Board on how royalty payments are calculated for subscription services.
The CRA revealed at the time that that streaming companies would be compelled to lift their payouts from 10.5 percent to 15.1 percent of revenue to songwriters and music publishers — a boost of more than 44% — over the five years from 2018 to 2022.
On the other side, the digital services, which included Amazon, Apple, Google, Pandora and Spotify, had opposed the proposed rate increase advocated by the National Music Publishers’ Association (NMPA).
That bonus was to be split between the mechanical and performance royalties to publishers and songwriters, and would have been the biggest single increase in mechanicals in CRA history.
Not so fast.
The Court of Appeals has returned the ruling back to CRB’s three-judge panel, not because the sums are all wrong but on a procedural matter.
It also wants more explanation from the CRB on why it modified pricing calculations on music bundle offerings from its initial rate determination.
What all this means is that, for now, nothing happens. It’s “so far unclear” whether the 44% increase in royalties will stay put, writes Billboard’s Ed Christman.
As it stands, neither side can claim victory, or a bruising defeat.
— NMPA (@NMPAorg) August 11, 2020
NMPA sees positives in the ruling, and the trade body’s president and CEO David Israelite fired off some combative remarks at Spotify and Amazon.
“We are heartened that the Court understands and supports the fact that songwriters are grossly underpaid by streaming services,” he explained in a statement Wednesday (12th August).
“It is shameful that Spotify and Amazon have now spent millions of dollars – money which could’ve been paid to songwriters – on attempting to deny them a raise based on technicalities.”
Referring to an appeal launched by Spotify and Amazon last March against the proposed rate gain, Israelite said the digital music platforms were “shameless” in their efforts “to undercut the very creators they rely on.”
The music publishers will “continue to fight Spotify and Amazon’s brazen attempts to cut songwriters’ royalties,” he said in a statement.
Spotify and Amazon have yet to respond.
Read more here.
This article originally appeared on The Industry Observer, which is now part of The Music Network.