Streaming services like Spotify and Google Music will soon have to change the way they pay artists on their platform. The U.S. Copyright Royalty Board has just approved the largest increase ever in payment rate for songwriters and song publishers. Streaming platforms are now expected to pay 15.1 percent of revenue to artists, nearly a 50 percent increase from the previous rule of 10.5 percent.
The decision was made by three judges in the U.S. Copyright Royalty Board, who were appointed by the Library of Congress. For many years, publishers and songwriters had been battling streaming platforms for a higher share of revenue. As the two sides were unable to come to an agreement, the U.S. Copyright Royalty Board was forced to intervene.
This change to revenue rates will not completely satisfy the music publishers and artists, as their goal was to earn flat fees based on the number of times their music is played and the number of users on each streaming platform. For example, each songwriter would receive 15 center per 100 plays and an additional $1.06 for each paying user on the platform. The U.S. Copyright Board refused to put such rules into play, instead restricting its ruling to the revenue share model.
Companies affected by the ruling include Amazon, Google, Spotify, and Pandora, all of which offer paid streaming services with large libraries of music. Apple has distanced itself from competitors on this issue, as it has deemed the current revenue structure to be unsound. As a result, the company is facing a separate class action lawsuit.
Further discussion and negotiation on the subject is expected, especially now that a bill called the Music Modernization Act has been entered into Congress. The law would set up a new government group to oversee digital rights and royalties.