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- May 28, 2023
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Good news songwriters: the Copyright Royalty Board in the US issued a written determination this week upholding the mechanical royalty rate rise across the five years between 2018 and 2022.
To recap: Last summer, the Copyright Royalty Board (CRB) maintained its decision to increase the headline rate paid to songwriters in the United States from on-demand streaming services between the years 2018 and 2022 (i.e. Phonorecords III).
That decision came four years after songwriters enjoyed a major victory when the CRB ruled that songwriter/publisher royalty rates for streaming and other mechanical uses were to rise significantly in the US.
That ruling centered on an increase in the overall percentage of streaming services’ US revenues that legally have to be paid by the likes of Spotify to songwriters.
The CRB decided to move that percentage figure up from 10.5% to 15.1% across the five years between 2018 and 2022. It was the largest rate increase in the history of the CRB.
However, Spotify and other music streaming companies, including Amazon and Google/Alphabet ( but not Apple) – subsequently launched a legal appeal against the new rates, arguing that they were unjustified.
In July last year, the CRB made its final decision – and decided that the 15.1% rate was staying.
Now following initial remand proceedings, the court has finally confirmed the result of Phonorecords III, according to its Initial Determination published this week.
The determination is currently restricted, however, MBW understands that it doesn’t change anything from the prior decisions on remand, but rather codifies the rates that were expected from prior rulings, and primarily the Initial Ruling from July 2022.
Those rates can be seen below:
According to the CRB, “upon the issuance of a Final Determination, and in the absence of changes arising from any motion for rehearing that might be filed by a party, these rates and terms will be applicable to the prior period of January 1, 2018 through December 31, 2022”.
It adds that, “the initial determination is currently being reviewed to determine which portions, if any, contain confidential information that must be redacted before release to the public”.
Reacting to the results of the initial remand decision, NMPA President & CEO David Israelite, said: “We are pleased the court finally has confirmed the result of Phono 3, a case which was decided in 2018.”
“Now songwriters have some certainty about their rates, and we will ensure they receive the hundreds of millions of dollars that digital streaming companies owe them during this adjustment period.”
David Israelite, NMPA
He added: “This initial remand decision upholds the 15.1% headline rate increase we fought for, however the length of time we have waited for this decision proves the Copyright Royalty Board system is woefully flawed.
“Now songwriters have some certainty about their rates, and we will ensure they receive the hundreds of millions of dollars that digital streaming companies owe them during this adjustment period.”
Bart Herbison, Executive Director of the Nashville Songwriters Association International (NSAI) added: “The testimonies of the three songwriter witnesses in this trial were powerful, convincing and illustrated the difficulty of songwriters earning a living in the streaming era — as well as the importance and value of the composition in the commercial music process.”
Herbison added: “Steve Bogard, Liz Rose and Lee Miller, all NSAI board members, were moving and informative and played a huge role in the historic increase.
“The process is long and difficult requiring time and preparation. We are thankful to these songwriters and to the NMPA.”
Seperately, last summer also brought triumphant news for songwriters and publishers in the US after the NMPA, NSAI, and the trade org for digital music services in the US DiMA, agreed to a settlement for higher mechanical streaming royalty rates in the U.S. ahead of Copyright Royalty Board proceedings known as ‘Phonorecords IV’.
In December, The Copyright Royalty Board (CRB) officially accepted a (near) music industry-wide settlement that improved songwriters’ streaming royalty rates in the United States from January 1, 2023.
The settlement – known as ‘Phonorecords IV’ or ‘CRB IV’ – will see songwriters and music publishers paid a headline rate of 15.35% of a given interactive streaming service’s US revenue by 2027, phased in over the five-year term.
Music Business Worldwide
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