On Friday (July 1), the Copyright Royalty Board reached a decision on the appeal of the Phonorecords III proceedings. The CRB decided to uphold the 15.1% headline rate increase that was determined in 2018, while returning the Total Content Cost (TCC) and bundle definitions to the Phonorecords II levels.
In 2019, Spotify, Amazon, Google and Pandora appealed the rate increase won in 2018 by NMPA and NSAI, which raised mechanical streaming rates from 10.5% to 15.1% over years 2018 – 2022. Due to this appeal, copyright owners received the lower rate while the remand was pending. The trial for CRB IV, which determines rates for 2023-2027, begins later this year.
Professionals and organizations from all across the industry have released statements reacting to Friday’s news.
Harvey Mason Jr., CEO of the Recording Academy, shared, “Today’s decision was an impactful victory for songwriters, as the Copyright Royalty Board reaffirmed the 15.1% headline rate increase in royalties paid by streaming services to publishers and songwriters for the 2018-22 time period. We applaud the judges for upholding this decision, and the NMPA for their tireless work fighting the appeal. The Recording Academy will continue to champion the songwriters and other music people in our community and fight to ensure they are fairly compensated for their contributions to the musical process.”
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Digital Media Association (DiMA) President and CEO, Garrett Levin, shared, “The streaming services thank the Judges for their efforts. Today’s decision reflects a significant increase in the royalties that will be paid to publishers. The work to give effect to these new rates will soon begin in earnest. The streaming services are committed to working with the MLC and music publishing companies to facilitate the accurate distribution of royalties. This proceeding is also a reminder that ratesettings do not—and cannot—take place in a vacuum. Today’s decision comes as the three major label groups—which operate the world’s three largest music publishers—continue to earn the lion’s share of the industry profits while reporting consistent double-digit revenue growth as a result of streaming. Looking ahead, streaming services believe it’s time for all stakeholders—labels, publishers, writers, artists and the services—to engage in comprehensive discussions to figure out the right royalty-sharing balance going forward.”
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Warner Chappell heads Carianne Marshall and Guy Moot shared, “Today, progress was made in the fight for fair songwriter compensation. After a long, drawn-out process—led by some of the biggest and most profitable tech companies in the world—to appeal the streaming rates set for 2018 to 2022 in a proceeding known as Phono III, the Copyright Royalty Board (CRB) is standing by its original headline rates… In more good news, in May, the RIAA, NMPA and NSAI reached a revised settlement to increase the rate for physical and download sales for 2023 to 2027 from 9.1 cents to 12 cents per song–which represents a 32% increase in year one and includes an annual cost of living adjustment for subsequent years… While we should celebrate these important moments, our work doesn’t stop here. We will continue to fight for higher Total Content Costs (TCC) rates—the percentage of label revenue publishers and songwriters receive from streaming—as well as more favorable terms for bundles and other discounts that streaming services offer… You will be hearing from us again soon, and we encourage you to also follow NMPA, NSAI and SONA for important updates. We must all continue to fight the good fight.”
John Ozier, AIMP National Chair and Nashville Chapter President; Teri Nelson Carpenter, AIMP Los Angeles Chapter President; Michael Lau, AIMP New York Chapter President; and Tony D. Alexander, AIMP Atlanta Steering Committee Chair shared in a joint statement, “Finally, nearly five years after the initial CRB ruling, independent publishers and songwriters will receive the 15.1% royalty rate they have earned and are owed from DSPs for the years 2018-2022. While we are happy that this prior increase has been solidified and are sure the influx of back pay will help publishers and songwriters in the short term, we now find ourselves in the midst of the next CRB Phono IV trial with another increase necessary to sustain rights-holders over the long term. We add our voice to the chorus of organizations fighting for a fair and equitable rate for publishers and songwriters, and encourage the CRB judges to set a better rate for the next five years.”
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