March 8, 2019
Subscription streaming music services such as Spotify, Pandora, Amazon and Google are planning to appeal proposed royalty rate increases for artists finalized last month by the Copyright Royalty Board.
It marks the first time music distributors have appealed compensation rates to artists. Apple Music, the world’s largest streaming service with nearly 50 million subscribers, is not contesting the royalty hike.
The three-member CRB ruled last year — in a 2-1 vote — to increase artists’ share of streaming and record label revenue from 10.1% to 15.1% through 2022.
The streaming services and artists groups spent millions lobbying their sides of the debate. Spotify & Co. contend the decision to increase artists’ compensation involved “serious” procedural and “substantive” concerns.
“If left to stand, the CRB’s decision harms both music licensees and copyright owners,” the services said in a joint statement. “Accordingly, we are asking the U.S. Court of Appeals for the D.C. Circuit to review the decision.”
David Israelite, CEO of National Music Publishers Association, criticized the streaming services for undermining the artists that drive consumer adoption.
“When the Music Modernization Act became law [in 2018], there was hope it signaled a new day of improved relations between digital music services and songwriters,” said Israelite. “That hope was snuffed out today when Spotify and Amazon decided to sue songwriters in a shameful attempt to cut their payments by nearly one-third.”