Songwriters will now be getting paid more from streaming services thanks to a new ruling from the Copyright Royalty Board on Saturday. According to Variety, over the next five years, songwriter rates will increase by almost 50 percent.
The board ruled in favor of the National Music Publishers’ Association and the Nashville Songwriters’ Association International, against streaming services like Amazon, Apple, Google, Pandora, and Spotify. On one side, writers were fighting for higher per stream rates, while streaming companies were arguing for reduced rates. In the end, the new streamlined rates favor writers, who will be getting the best deal they’ve ever seen under compulsory license, or distribution without the writers’ express consent.
“We are thrilled the CRB raised rates for songwriters by 43.8 percent – the biggest rate increase granted in CRB history,” the NMPA president and CEO David Israelite said. “Crucially, the decision also allows songwriters to benefit from deals done by record labels in the free market. The ratio of what labels are paid by the services versus what publishers are paid has significantly improved, resulting in the most favorable balance in the history of the industry.”
The rate for writers will be based on either the percentage of revenue or the total content costs (payments made to labels), depending on which is greater. This is a much more simplified process of calculating the revenue for writers/publishers compared to the previous method. The ratio of label to publisher/writers is 3.82 to 1, or $1 for writers to every $3.82 for the label. Since streaming overhauled the music industry, writers’ royalties have often been at the mercy of those corporate companies. Writers argued that the previous method of calculation offered support to the infant streaming industry, but is no longer useful.
This new change is definitely going to affect the costs big players like Apple, Google, and Amazon, Spotify, and Pandora will have to cough up for music. Unlike it's fellow streamers, Apple actually spoke out in support of the changing rates.
“The CRB was a long and difficult process but songwriters and music publishers together presented a powerful case for higher streaming royalty rates,” Nashville Songwriters Association International (NSAI) Executive Director Bart Herbison said. “Songwriters desperately need and deserve [these] rate increases.”