Digital service providers Spotify, Apple Music, Google and Pandora have all submitted papers that they believe will list songwriters' royalties for the years 2023 to 2027.
Copyright law says that every five years copyright fee judges oversee the discussions to determine which streaming services like Spotify and Apple Music are paying mechanical royalties to songwriters and publishers. These platforms are notorious for incredibly low payout rates and "exploitative practices" when it comes to paying musicians.
Magnus Höij / Wikimedia Commons
The National Music Publishers Association (NMPA) has campaigned for higher mechanical royalties for music publishers and songwriters. The organization's president and CEO, David Israelite, said these proposed sentences have "dire consequences for songwriters and music publishers."
He added that songwriters and publishers should take note of these submissions as they show how little these streaming giants care about the artists and songwriters who keep their platforms afloat.
"Amazon, Spotify, Apple, Pandora and Google have suggested the lowest license fees in history," Israelite told Music Business Worldwide. "Not only are they proposing to cut rates and conditions to wipe out all profits for the past 15 years, but they are actually proposing a structure that is worse than ever in the history of interactive streaming."
The NMPA has proposed a more comprehensive formula that is more beneficial to songwriters and publishers:
- 20% 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 the United States Congress to pass the Music Modernization Act, which President Trump signed in October 2018.
This was a significant step forward in the digital music age and ensured that songwriters received royalties on songs before 1972. Funding has also been raised for music producers and licenses for royalties and streaming services have been updated so that they can send payments more efficiently.
"(Musicians) were treated very unfairly," said Trump after the signing of the music modernization law. "You are no longer treated unfairly."
Unfortunately, however, songwriters and musicians continued to battle for equal pay with the company's major streaming platforms.
The Music Modernization Act also designed the Mechanical Licensing Collective (MLC) to collect and distribute license payments. "From January 1, 2021, songwriters and music publishers will have to register with the MLC via the online application portal in order to receive license payments under the new flat-rate license," says the website Copyright.gov.
Songwriters and music publishers are in an ongoing legal battle with the Copyright Royalty Board (CRB). In January 2018, the CRB decided that mechanical usage and streaming royalties would increase 44% between 2018 and 2022.
Songwriter revenue rose from 10.5% to 15.1% between 2018 and 2022, representing the largest rate hike the CRB has ever approved.
The CRB then confirmed its decision after the final songwriter pricing and terms were released. Spotify, Google, Amazon and Pandora all rejected the CRB's ruling in March 2019. Music advocacy group Songwriters of North America (SONA), co-founded by Kay Hanley, Michelle Lewis and attorney Dina LaPolt, reportedly condemned their decision.
"The war for higher and fairer prices has many fronts, but we hope the entire music industry will join forces to support our efforts in these crucial cases as they dictate the future of the streaming economy," Israelite told Music Business Worldwide .