The US Copyright Royalty Board (CRB) is currently conducting proceedings to determine the mechanical royalty rate that music streaming services will pay songwriters for the five years between 2023 and 2027.
Those proceedings, for the Determination of Rates and Terms for Making and Distributing Phonorecords (Phonorecords IV), also referred to as CRB IV, are conducted by three judges. The CRB is currently hiring for one of them.
This week (February 7), in a letter sent to Warner Chappell Music songwriters, and obtained by MBW, WCM Co-Chair and CEO Guy Moot, and WCM Co-Chair and COO Carianne Marshall call the proceedings a “critical moment” for songwriters, and urge them to “raise awareness around this important issue” over the coming months.
In the letter, Guy Moot and Carianne Marshall also write that, “Not only will the CRB decide the future mechanical royalty rates for streaming, there’s also a ‘ripple effect,’ where the CRB’s decision can influence other negotiations with streaming services, as well as future rates”.
In October 2021, music streaming service owners including Spotify, Apple, Amazon, Pandora and Google filed documents with the CRB stating what they think they should pay songwriters for the five years between 2023 and 2027.
Before these filings were public, the National Music Publishers’ Association (NMPA) claimed that the music streaming services were proposing to pay songwriters in the US the “lowest royalty rates in history”.
The NMPA’s own proposal asked for the current headline rate (i.e. the proportion of a service’s annual revenues paid to songwriters) to be increased to 20%.
That would be a 4.9% raise from the 15.1% rate the NMPA secured in the previous CRB process, which is currently being appealed by the likes of Spotify, Amazon and Google.
That appeal arrived the year after a major victory was handed to songwriters in the US in January 2018, when the CRB ruled that royalty rates for streaming and other mechanical uses would rise from 10.5% to 15.1% in the five years between 2018 and 2022, which would mark the largest rate increase in the history of the CRB.
That decision was ratified in February 2019, when the CRB published the final rates and terms for songwriters.
The following month (March 2019,) the likes of Spotify, Google, Amazon and Pandora (but not Apple) opposed the ruling, in what the NMPA equated to “suing songwriters”.
Commenting on the appeal in their letter to WCM’s US songwriters, Guy Moot and Carianne Marshall call the 10.5% rate “appallingly low”.
They also note that “songwriters, music publishers and other trade associations” like the NMPA and the Nashville Songwriters Association International “are advocating for an increase to 20% in Phono IV”.
“Without songwriters, we wouldn’t have songs or streaming services – there’d be no music business at all. You deserve this pay raise and more.”
Guy Moot and Carianne Marshall, Warner Chappell Music
Said Guy Moot and Carianne Marshall: “To break things down even more, these tech companies currently should be paying you 15.1% – the rate that was set by the CRB for 2022, in the last CRB proceeding called Phono III.
“But instead, Spotify, Amazon, Google and Pandora have spent more than four years appealing that ruling. While the appeal plays out, they’re still paying the rate set by the CRB for 2017 – just 10.5%.
“That’s an appallingly low rate. And now, some of the biggest and most valuable companies in the world are pushing to extend that 10.5% rate for the next five-year period.”
Elsewhere in the letter, WCM’s co-Chairs write that many songwriters “rely on songwriting as your primary source of income, and we’re doing everything in our power to achieve a positive outcome” [in the proceedings].
They add: “Without songwriters, we wouldn’t have songs or streaming services – there’d be no music business at all. You deserve this pay raise and more.”
You can read Guy Moot and Carianne Marshall’s letter in full below:
To our Warner Chappell songwriting family,
As your partners and your champions, we wanted to let you know about a crucial fight that will determine what you make from streaming both now and in the years to come.
In the U.S., there’s a portion of your revenue from streaming services (such as Spotify, Apple and Amazon) – mechanical revenue – that’s determined every five years by three judges who make up the Copyright Royalty Board (CRB) in Washington, D.C.
By early next year, in a proceeding known as Phono IV, the CRB will determine the mechanical royalty rates that streaming services will pay music publishers and songwriters between 2023 and 2027.
This is a critical moment. Not only will the CRB decide the future mechanical royalty rates for streaming, there’s also a “ripple effect,” where the CRB’s decision can influence other negotiations with streaming services, as well as future rates.
To break things down even more, these tech companies currently should be paying you 15.1% – the rate that was set by the CRB for 2022, in the last CRB proceeding called Phono III. But instead, Spotify, Amazon, Google and Pandora have spent more than four years appealing that ruling. While the appeal plays out, they’re still paying the rate set by the CRB for 2017 – just 10.5%. That’s an appallingly low rate. And now, some of the biggest and most valuable companies in the world are pushing to extend that 10.5% rate for the next five-year period.
On behalf of all songwriters, music publishers and other trade associations, the National Music Publishers’ Association (NMPA), the Nashville Songwriters Association International (NSAI) and Songwriters of North America (SONA) are advocating for an increase to 20% in Phono IV.
We’ve been actively involved in this rate proceeding with a seat on the NMPA Board and representation on various working groups, alongside our own writers and board members Liz Rose and Ross Golan. Several songwriter witnesses will also testify to the CRB about everything that goes into writing a song and how the streaming services’ efforts to devalue the works of songwriters is potentially devastating.
Many of you rely on songwriting as your primary source of income, and we’re doing everything in our power to achieve a positive outcome. Without songwriters, we wouldn’t have songs or streaming services – there’d be no music business at all. You deserve this pay raise and more.
Over the next few months, we encourage you all to raise awareness around this important issue and help spread the word throughout the broader songwriting community. Your voice matters most in this debate.
We’re hopeful the CRB will make the right determinations that support the best interests of music creators like you. No matter the outcome, we’ll continue to work tirelessly to support and defend your rights and create new opportunities for your songs.
In addition to your A&R team, we’re always available if you have thoughts or questions. You can also follow the NMPA, NSAI and SONA for important updates, and you’ll be hearing from us again soon as we get closer to the next steps in Phono III and Phono IV.
Source: Music Business World Wide
