Songwriter royalty rates to be increased over the span of five years
The Copyright Royalty Board (CRB) has announced that it will implement new songwriter royalties starting January 1st, 2023. The settlement, known as "Phonorecords IV" or "CRB IV," will see songwriters and music publishers receiving 15.35% of interactive streaming service's US revenue by 2027. This rate will be gradually phased in over the five years from 2023 to 2027, starting at 15.1% in 2023 and increasing incrementally until it reaches 15.35% in 2027.
New Streaming Royalty Rates to Start January 1st
The new songwriter royalty rates, published in the CRB's "Final Rule" Determination on December 30th, will be effective in the US on January 1st, 2023. They will apply to Amazon Music, Apple Music, Google/YouTube Music, Pandora, and Spotify.
In addition to the headline rates, music publishers may be paid based on a "Total Content Costs" calculation, which guarantees a minimum payment for song rightsholders based on the amount paid to recorded music rightsholders.
The settlement was proposed by a group of music industry bodies in August, including the National Music Publishers' Association (NMPA) and the Digital Media Association (DiMA).
"Starting January 1st, songwriters will enjoy the highest rates in the world and the highest rates in the history of digital streaming. Thanks to the many songwriter advocates who worked hard to make this happen. There are still many challenges ahead to ensure that songs receive their proper value, but the future is bright," stated CEO and President David Israelite.
The new songwriter royalty rates come as a welcome change for songwriters and music publishers in the US, who have long been advocating for increased payments. The streaming industry has faced criticism for its low royalty rates, with some arguing that artists and songwriters are not fairly compensated for their work. However, the CRB's decision to increase royalties is a step in the right direction, and it is hoped that it will lead to more sustainable careers for those in the music industry.
New Rates Only Apply to Interactive Streaming
However, it is essential to note that the new songwriter royalty rates will not apply to all forms of music streaming. They will only apply to interactive streaming services, which allow users to select specific songs or albums to listen to. Non-interactive streaming services, such as Pandora's free radio service, will not be subject to the new rates. In addition, the rates will not apply to other forms of music licensing, such as sync licensing for film and television.
The music industry has undergone significant changes in recent years, with the rise of streaming leading to a shift away from traditional forms of music consumption such as CD and vinyl sales. While streaming has brought new opportunities for artists and music companies, it has also presented challenges, with low royalty rates being a significant concern. Therefore, the CRB's decision to increase songwriter royalties for songwriters and music publishers is a positive development. It is hoped that it will lead to more sustainable careers for those in the industry.