Warner Chappell: Spotify, Google and Amazon are paying songwriters an ‘appallingly low’ rate in the US
The United States Copyright Royalty Board (CRB) is currently conducting a process to determine the mechanical royalty rate music streaming services will pay songwriters for the five years between 2023 and 2027.
This procedure, for the determination of tariffs and conditions for the manufacture and distribution of phonographic recordings (phonographic recordings IV), also referred to as CRB IV, are conducted by three judges. The CRB is currently recruiting for one of them.
Today (February 7), in a letter sent to songwriters at Warner Chappell Music, and obtained by MBW, WCM Co-President and CEO Guy Moot and WCM Co-President and COO Carianne Marshall , call the proceedings a “critical moment” for songwriters, and urge them to “raise awareness of this important issue” over the coming months.
In the letter, Guy Moot and Carianne Marshall also write that “not only will the CRB decide future mechanical royalty rates for streaming, but there is also a ‘ripple effect’, where the CRB’s decision may also influence d ‘further negotiations with streaming services than future rates’.
In October 2021, owners of music streaming services including Spotify, Apple, Amazon, Pandora and Google filed documents with the CRB showing what they believe they will have to pay songwriters for the five years between 2023 and 2027. .
Before these filings were made public, the National Music Publishers’ Association (NMPA) claimed that music streaming services were offering to pay songwriters in the United States the “lowest royalty rates in history.” .
The NMPA’s own proposal called for the current headline rate (i.e. the proportion of a service’s annual revenue paid to songwriters) to be increased to 20%.
That would be a 4.9% increase from the 15.1% achieved by the NMPA in the previous CRB process, which is currently being appealed by Spotify, Amazon and Google.
That call came the year after a major victory was handed to songwriters in the United States in January 2018, when the CRB ruled that royalty rates for streaming and other mechanical uses would drop from 10 .5% to 15.1% over the five years between 2018 and 2022, which would mark the largest rate hike in CRB history.
This decision was ratified in February 2019, when the CRB published the final rates and conditions for songwriters.
The following month (March 2019), Spotify, Google, Amazon, and Pandora (but not Apple) objected to the decision, in what the NMPA amounted to “suing songwriters.”
Commenting on the call in their letter to American WCM songwriters, Guy Moot and Carianne Marshall call the 10.5% appallingly low rate.
They also note that “songwriters, music publishers, and other professional associations” like the NMPA and the Nashville Songwriters Association International “are advocating an increase in 20% in Phono IV”.
“Without songwriters, we wouldn’t have songs or streaming services – there wouldn’t be any music business at all. You deserve that pay raise and more.
Guy Moot and Carianne Marshall, Warner Chappell Music
Guy Moot and Carianne Marshall said: “To break it down even further, these tech companies would currently have to pay 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 this decision. As the appeal unfolds, they are still paying the rate set by the CRB for 2017 – just 10.5%.
“It’s an appallingly low rate. And now some of the world’s largest and most valuable companies are pushing to extend that 10.5% rate for the next five years. »
Elsewhere in the letter, WCM’s co-CEOs write that many songwriters “rely on songwriting as their primary source of income, and we are 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 wouldn’t be any music business at all. You deserve that pay raise and more.
You can read Guy Moot and Carianne Marshall’s letter in full below:
To our Warner Chappell family of songwriters,
As your partners and champions, we wanted to share with you a pivotal fight that will determine what you do with streaming now and in the years to come.
In the United States, a portion of your income from streaming services (such as Spotify, Apple and Amazon) – mechanical income – is determined every five years by three judges who make up the Copyright Royalty Board (CRB) in Washington, DC
Early next year, in a process 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.
It is a critical moment. Not only will the CRB decide future mechanical royalty rates for streaming, but there is also a “ripple effect,” where the CRB’s decision may influence further negotiations with streaming services, as well as future rates. .
To break things down even further, these tech companies should currently pay you 15.1% – the rate that was set by the CRB for 2022, in the latest CRB procedure called Phono III. But instead, Spotify, Amazon, Google and Pandora have spent more than four years appealing the decision. As the appeal unfolds, they are still paying the rate set by the CRB for 2017 – just 10.5%. This is an appallingly low rate. And now some of the world’s largest and most valuable companies are pushing to extend that 10.5% rate for the next five years.
On behalf of all songwriters, music publishers and other professional associations, the National Music Publishers’ Association (NMPA), Nashville Songwriters Association International (NSAI) and Songwriters of North America (SONA) advocate for an increase to 20% Phono IV.
We have been actively involved in this by serving on the NMPA Board and being represented on various working groups, along with our own editors and board members Liz Rose and Ross Golan. Several songwriter witnesses will also testify before the CRB about everything that goes into writing a song and how efforts by streaming services to devalue the works of songwriters are potentially devastating.
Many of you rely on songwriting as your main source of income, and we are doing everything in our power to achieve a positive result. Without songwriters, we wouldn’t have songs or streaming services — there wouldn’t be any musical activity at all. You deserve that pay raise and more.
Over the next few months, we encourage you all to raise awareness about this important issue and help spread the word to the wider songwriting community. Your voice matters most in this debate.
We hope the CRB makes the right decisions that support the best interests of music creators like you. No matter the outcome, we will 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 are always available if you have any ideas or questions. You can also follow the NMPA, NSAI and SONA for important updates, and you’ll hear from us again as we get closer to the next steps for Phono III and Phono IV.
Guy & CarianneThe music industry around the world