Wednesday, October 5 2022

Yesterday (August 31) brought triumphant news for songwriters and publishers in the United States.

The National Association of Music Publishers (NMPA), the Nashville Songwriters Association International (NSAI) and the trade organization for Digital Music Services in the United States (DiMA), have agreed to a deal for higher mechanical streaming royalty rates in the United States ahead of the Copyright Royalty Board procedure known as ‘Phonorecords IV’.

These procedures, for years 2023-2027, should start later this year.

It follows a previous legal battle between publishers and streaming services in the United States known as “Phonorecords III”, during the five years between 2018 and 2022, in which the CRB decided to increase songwriter/publisher royalty rates for streaming and other mechanical uses of 10.5% at 15.1% .

Spotify and various other music streaming platforms have appealed this decision, but last month the CRB officially obtained that 15.1% rates for publishers and songwriters.

According to the new agreement, for the years 2023-2027the facial royalty rate will be set at 15.35%, which, according to a press release issued yesterday by the NMPA, NSAI and DIMA, will be phased in over a five-year period.

The press release added: “The agreement also includes a number of changes to other components of the tariff, including increases to per-subscriber minimums and total content costs (TCC), i.e. calculations that reflect the rates the services pay record labels.”

This rate of 15.35% is slightly higher than the current rate of 15.1%, but lower than the 20% proposed by the NMPA last year.

According to a joint announcement released yesterday by music publishers and digital services, “[This 15.35%] agreement will provide higher royalty rates for songwriters and music publishers, drive sustainability, innovation and continued investment for the entire industry, and usher in a new era of collaboration between all parties .

As noted in our report yesterday, this proposal could still be rejected by the CRB if significant opposition to its suggestions arises, but all parties involved in the proposal are hopeful that the CRB will give it the green light.

Music publishers reacted positively to the news. Here’s what they had to say:


Sony Music Edition

In a statement posted to Twitter, Sony Music Publishing Chairman and CEO Jon Platt said, “Today marks a significant achievement for the songwriting community. A settlement has been reached in the US Copyright Royalty Board (CRB) Phonorecords IV proceeding that will increase the rates paid by audio streaming services only to music publishers and songwriters in the United States during the next five-year period starting in 2023

“The settlement is a significant victory for songwriters and composers, reflecting years of hard work and litigation. It also brings greater certainty over the next five years because, unlike a lawsuit, it does not there is no chance of appeal.

Jon Platt, Sony Music Publishing

“With this settlement, overall rates will increase from 15.1% to 15.35% over the next five years, while improving alternative rate structures by increasing the minimum per subscriber, adopting better terms for bundles and increasing the total cost of content which guarantees a percentage of what record companies are paid

“The settlement is a significant victory for songwriters and composers, reflecting years of hard work and litigation. It also brings greater certainty over the next five years because, unlike a lawsuit, it does not there is no chance of appeal.

“Congratulations to all of the amazing songwriter advocacy groups who have made this achievement possible, including the NSAI, SONA the 100 Percenters and BMAC.

“While much more needs to be done in the fight for better compensation and recognition for songwriters, today marks an important milestone in the industry. I look forward to working together as we continue to to elevate the value of songwriters across the company. Above all, I want to thank you, the sunrise and the songwriters at SMP. Thank you for your partnership and collaboration.


Universal Music Publishing Group

Jody Gerson, President and CEO of Universal Music Publishing Group, said, “We welcome today’s announcement which will see a 15.35% increase in mechanical royalty rates paid to songwriters in the United States. United from 2023 to 2027.

“This is the result of a long, collaborative effort by the NMPA, NSAI, our team members, and the entire songwriting community in the United States to ensure recognition and fair compensation for our songwriters. .”

Jody Gerson, Universal Music Publishing Group

“This is the result of a long, collaborative effort by the NMPA, NSAI, our team members, and the entire songwriting community in the United States to ensure recognition and fair compensation for our songwriters. .

“Having worked together as an industry to secure a fixed raise in the Phonorecords III deal last month, we are grateful for our newly strengthened partnerships with DSPs, which will help recognize the value that songwriters bring to the world. , both now and in the future.”


Warner Chappell Music Logo

Warner Chappell Music

In a social media post, Warner Chappell Music told its songwriters, “You have joined us in this fight, and we wouldn’t be here if it wasn’t for you. While there’s always more work to be done to make sure you’re paid what you deserve, we’re optimistic about the future.

“Today, after months of negotiations, the NMPA and NSAI, on behalf of all songwriters and publishers, have reached an agreement with streaming services to set the highest royalty rate for the streaming history all over the world.

“While there is still work to be done, this is an important and historic moment in the ongoing fight for fair compensation for songwriters.”

Warner Chappell Music

“The settlement will also improve the alternative pricing structure by increasing per-subscriber minimums providing better terms for bundled offers of music products with other offers and increasing song rights paid as a percentage of the total cost of content (TCC), i.e. paid record labels. .

“While there is still work to be done, this is an important and historic moment in the ongoing fight for fair compensation for songwriters.”


Hipgnosis Songs

Merck Mercuriadis, Founder and CEO of Hipgnosis Songs, said, “I would like to congratulate David and Bart and their teams at NMPA and NSAI respectively.

“Hipgnosis fights and defends songwriters every day of its existence. That’s why I started the company.

“Songwriters winning the CRB III appeal was an incredibly important milestone, but it was a flawed positive. What has been achieved with this CRB IV result greatly improves that and gives songwriters stability for the 5 next few years without arguments or fear of appealing to the highest rates ever paid in the age of streaming.For that, the streaming services, DIMA and Garrett Levin are also to be applauded.

“This is another important step towards the eventual recognition that the songwriter and the song are the most important components of the music industry.”

Merck Mercuriadis, Hipgnosis Songs

Mercuriadis added, “This is another important step towards the final recognition that the songwriter and the song are the most important components of the music industry.

“I’ve always believed that to get songwriters to where they really deserve to be in the economic equation, we needed to get out of legislation and have real free market negotiations with recorded music companies and streaming services are in the best position to recognize and reward the incredible contributions of songwriters, because without them, their businesses wouldn’t exist.

“The context of stability for the next 5 years provided by what has been achieved with CRB IV will allow us to ensure that in the future no discussion will ever again take place about how a songwriter is paid without songwriters at the table voicing the consensus views and demands of the songwriting community alongside NMPA, NSAI, DIMA, Spotify, Apple, Universal, Sony, Warner, BMG et al.


Kobalt Music

In a statement posted on social media, Kobalt Music said, “From day one, we have championed transparency and fair compensation for songwriters, and embraced the digital transformation of the music industry.

“Today’s settlement is a historic day for songwriters, securing the highest stream rate in the world and a win for all.”

Kobalt

“Today’s settlement is a historic day for songwriters, securing the highest stream rate in the world and a win for all.”The music industry around the world

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