Newly proposed royalty rates cause chaos with artists and labels

Streaming services have never come without issues. In the US currently, a new set of royalty rates have been proposed and sparked outrage in some quarters as the never-ending battle between music publishers and streaming platforms reaches boiling point. 

Just like an election, every five years, a panel of judges known as the Copyright Royalty Board (CRB) determine the royalty fees that streaming companies should pay artists and music publishers. For the forthcoming 2023-2027 timeframe, Spotify, Amazon, Apple, Pandora, Google and other streaming platform owners recently submitted their suggested rates to the CRB. The rates have immediately come under fire with a backlash from trade group The National Music Publishers Association (NMPA). 

Officially, the numbers have not been publicly announced. However, in an interview with Music Business Worldwide, NMPA President and CEO David Israelite described the figures as “the lowest royalty rates in history.” 

“Not only do they propose rolling back rates and terms to erase all gains over the last 15 years, but they are proposing a structure worse than at any point in the history of interactive streaming,” he continued. 

In a proactive comeback, the NMPA have issued their suggested rates and formula for success: 

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

It has been uncertain times for the industry as the 2018 – 2022 period has been widely criticised with doubts over the timeline rates. Back in 2018, the CRB approved a 44% rate increase, which was later appealed successfully and shut down by Amazon, Google and Spotify.