Streaming royalty rates to be increased in the US, the Copyright Royalty Board confirms

The US Copyright Royalty Board (CRB) has set a new royalty rate for streaming services of 15.1% to pay songwriters and publishers for 2018 to 2022.

The CRB is committing to the 15.1% headline rate as initially decided in 2018, Variety reports. In 2019, streaming service providers such as Spotify, Google, Amazon and Pandora appealed against the increase for publisher and songwriter payouts on streamed music. (Apple Music did not join in the appeal.)

The decision has not been publicly announced by the CRB, though sources and the National Music Publishers Association (NMPA) president and CEO David Israelite confirm to Variety that the 15.1% royalty rate will go ahead for streams in 2018 through 2022. In the interim, streaming services were paying a mechanical royalty rate of 11.4%, and they are required to backpay the difference now that the rate for the four-year period has been reaffirmed. 

The new rate is an increase from the 2013-2017 mechanical royalty rate of 10.5%, up 44%. For the following 2023-2027 period, the NMPA hopes to increase the payout rate to 20%. 

Variety reports the CRB has also made decisions on how to handle streaming family plans and the Total Content Costs (TCC) rate, which affects label revenue, though those results are more in favour of streaming services. Details are not yet known. 

“Today the court reaffirmed the headline rate increase we earned four long years ago, confirming that songwriters need and deserve a significant raise from the digital streaming services who profit from their work,” Israelite said in a statement to Music Week. “…This process was protracted and expensive and though we are relieved with the outcome, years of litigation to uphold a rate increase we spent years fighting for is a broken system.”

“Now, songwriters and music publishers finally can be made whole and receive the rightful royalty rates from streaming services that they should’ve been paid years ago,” he said. “We will work to ensure that the services quickly backpay copyright owners as they are required by law.”

The streaming business model has long been criticised as insufficient for artists, writers and publishers. In 2020, US-based groups The United Musicians and Allied Workers Union (UMAW) launched the Justice At Spotify campaign for increased payouts to artists, and in 2021, the UK government said the streaming economy needs a “total reset” in a damning report.