Streaming Services To Pay More For Music

The federal Copyright Royalty Board handed the nation's legions of songwriters a massive win Saturday in their yearlong dispute over the royalty rates that streaming companies pay them.

According to The Tennessean, the streaming companies must now pay songwriters and publishers 15.1 percent of their revenue, up from 10.5 percent. The rate-setting hearing pitted songwriters and publishers against the top streaming companies, including Spotify, Apple Music, Google, Pandora and Amazon.

Together with the building momentum behind sweeping federal legislation known as the Music Modernization Act, the head of the National Music Publishers Association called this "the most exciting 24 hours for songwriters" in many years. The Music Modernization Act would overhaul the digital mechanical licensing process and ultimately lead to higher royalty rates for songwriters and music publishers.

"We are thrilled the CRB raised rates for songwriters by 43.8% — the biggest rate increase granted in CRB history," NMPA President and CEO David Israelite said.

In the decision, released in the early morning hours on Saturday the CRB also lifted the total content cost cap, which limited how much total revenue the streaming companies must pay for their licenses.

In addition to lifting the cap, the CRB changed the formula for calculating how much royalties songwriters are paid by streaming companies. Songwriters will be paid either 15.1 percent of the total revenue, or about 26 percent of the revenue paid out to record labels and artists.

Finally, the CRB delivered another crucial win for songwriters by implementing a late fee — up to about 18 percent annually — which streaming companies must pay on any royalty revenue not paid on time. This is a first-ever fee.