This week, songwriters, composers, and publishers will begin lobbying the Copyright Royalty Board for larger royalty fees from streaming services. The hearing for songwriters and their professional organizations is set to start today.
The current model offers songwriters a share of total revenue generated by on-demand streaming platforms. Most organizations on the side of songwriters are now pushing for a change to a per-stream royalty model. “We should get compensated every time someone streams a song,” said David Israelite, CEO of the National Music Publishers Association. “The structure is a complicated formula that’s about percentages of revenue, and we don’t think that works well for us, or that it’s fair to songwriters.”
The CRB will be reviewing proposals from several parties as it works to determine the royalty rates paid for interactive streams over the 2018-2022 period. The NMPA and the Nashville Songwriters Association International jointly submitted their proposal for the change to publisher payments back in August. Apple has also offered its own suggestions for the rate structure, and other streaming companies such as Alphabet/Google, Amazon, Pandora, and Spotify are expected to come forward with their own proposals as well.
The process of setting webcast stream rates was one of the major news stories of 2016, and was the top subject for RAIN News readers last year. Although the decision for the revised rates was issued in December 2015, the impact of that ruling rippled across the industry. The debate over interactive stream royalty rates will surely be just as contentious this year, especially given that streaming is nearing a tipping point in the music economy. Streaming has become a larger and larger share of the U.S. music business, but it still has proven difficult for the companies running those services to turn a profit. The CRB will have to balance the needs of artists who are now dependent on streaming for a greater percentage of their income with the businesses that are fighting to make finances work under the heavy weight of the current licensing and royalty fees. Expect this to be one of this year’s most influential and hotly contended developments.