Documents that propose rates of pay for songwriters for 2023 to 2037 period have been filed by the streaming giants.

Some of the biggest streaming giants, including Spotify, Apple Music, Pandora, Google and Amazon Music have proposed the lowest of rates for songwriters in their history, reports MusicTech.

There is no detailed information available, but the companies recently filed documents with the US Copyright Royalty Board (CRB) that proposed new rates of pay for songwriters for the 2023 to 2037 period. This has sent an angry ripple around the music industry.

Every five years, The Copyright Act requires the dedicated Copyright Royalty Judges to investigate the rates of mechanical royalties paid by streaming platforms to songwriters and publishers.

Back in 2018, US-based songwriters had a major victory when the CRB declared that royalty rates for music streaming, as well as other mechanical uses, would increase to 44% between 2018 and 2022.

They also stated that songwriters would get a bigger slice of the whole pie with an increase in revenue share that’s paid to songwriters. This was a significant increase from 10.5% to 15.1% in the same time frame.

Music Business Worldwide reported that this ruling was ratified in February 2019 when the CRB published the final rates and terms for songwriters.

The NMPA proposed a fairer model for music publishers and their songwriters, a formula made of four parts which include:

  • 20% percentage of revenue; or
  • 40% of what record labels and artists receive; or
  • $1.50 per subscriber; or
  • $0.0015 per play

However, this has not come to fruition. Producer Hive created the following infographic to display how much streaming giants pay per play and who gets what percentage in 2021.

Royalty share, Source: Producer Hive

The UK government recently held an inquiry into the streaming industry. They too are also calling for fairer rates of pay for both songwriters and performing artists.

Music executives such as David Israelite, CEO of the National Music Publishers Association (NMPA), spoke with Music Business Worldwide about the new royalty rates proposed by the streaming companies. He stated that the new rates “prove how much, or how little, [streaming companies] truly value the creators they rely on,” describing the proposed changes as the “lowest royalty rates in history”.

Israelite also added that “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”.

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