Copyright Royalty Board (CRB IV), or the Phonorecords IV proceedings, is currently underway to determine the new statutory streaming royalty rate paid to songwriters between the years of 2023 and 2027.
On Oct. 14, National Music Publishers Association (NMPA) President & CEO David Israelite made a social media post claiming that a number of digital service providers, including Amazon, Spotify, Apple, Pandora and Google, were proposing the “lowest royalty rates in history.”
The filings aren’t public yet, but according to Israelite, “not only do they propose rolling back rates and terms to erase all gains over the last 15 years, but they actually are proposing a structure worse than at any point in the history of interactive streaming.”
Nashville Songwriters Association International (NSAI) Executive Director Bart Herbison recently spoke with MusicRow to explain what’s going on at the CRB IV proceedings, what NSAI and NMPA are fighting for, and how songwriters and the publishing community should respond.
First, Herbison reminds us how the streaming services pay songwriters today. Currently, songwriters receive the greater of a per subscriber payment, a percent of revenue, or a percent of the total content revenue.
At the CRB IV trial, NSAI and NMPA are asking for a fourth revenue stream: a per stream payment. “We’re asking for substantial increases,” Herbison tells MusicRow. “We are seeking the greater of:
– On the percent of revenue model, we want 20%.
– Total content cost: 40%.
– Per subscriber: $1.50 per month.
– And per stream: $0.0015 per stream.”
He explains that while the streaming services claim they are still agreeing to the headline rate of 10.5%, they want to make changes on what is applicable revenue to split.
“Spotify wants massive carve outs that could lead to zero revenue per subscriber on the music side. They redefine bundles in such a way it can allow for a zero rate for music. And Spotify eliminates the safety net of total content costs for songwriters.
“Apple wants 30% of their revenue to be sheltered from defined revenue because of their App Store fees, another 10% to be sheltered for distributor fees, and additional uncapped revenues to be sheltered for miscellaneous fees. That would cut the effective rate significantly,” Herbison says, adding that Apple wants to eliminate the total content cost safety net, expand the family and student discounts, and make the free trial period longer.
All of the other proposals from streaming services are similar in that they aim to change the portion of revenue applicable to the headline rate and to diminish the value of total content. “They also ask that family and student discount plans be redefined or removed from the platforms,” he adds. “We’re asking for a new way to get paid, they’re asking for us to take significant decreases on what we already got paid by changing the definitions and terms.
“The devil is in the details here. They are going to claim that they don’t dispute the headline rate of 10.5%, but they just gut the definition of revenue to where it’s essentially tragic.”
NSAI chose and helped brief five songwriters who will testify at CRB IV, which include Autumn Rowe, NSAI President Steve Bogard, Jamie Floyd, Jimmy Yeary, and Angela Hunte. “We tried to represent different genres, ethnicities, geographical regions, and different eras of music, because those correlate with different concerns that American songwriters have,” Herbison says.
The songwriters will testify sometime in April 2022.
“Pat the back of these five songwriters who are testifying, they have given lots of time already, and this is a scary thing, to get up and testify against streaming services,” he says. “This is David versus Goliath, again.
“It’s BS, and you can quote on me on that, for the streaming corporations to say they care about songwriters, to put out articles that say we need to sit down and have a friendly discussion,” he adds. “How can you have a friendly discussion when some of their proposals take us back more than 15 years ago when we were already dying?”
Ironically, the CRB III trial that raised rates from from 10.5 percent of revenue to 15.1 percent of revenue is still under an appeal by some of the streaming services. Herbison is skeptical that the appeal of CRB III will be resolved before anyone testifies for CRB IV.
Songwriters are encouraged to follow NSAI and NMPA on social media and to stay tuned for calls to action in the coming days and months. “Nothing less than the very profession of songwriting is at stake,” Herbison sums.
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