The Copyright Royalty Board of the U.S. Library of Congress that decides on the licensing fees paid by streaming services to artists (and their publishers) has increased the royalty rate from 10.5% to 15.1% of total revenues for the five-year period from 2018 to 2022, it is reported. As a result of the change, the rates paid by Spotify, Apple, Pandora, Amazon, Google, and others will increase.
Speaking on the same, David Israelite, President and CEO of the National Music Publishers’ Association characterized the change as both “the most favorable balance in the history of the industry” and “not a fair split.”
Streaming services rely on the compulsory license established under U.S. law rather than negotiate directly with publishers. For comparison, Netflix and Amazon must negotiate with studios for the use of programs, which is why their catalogues are not ‘all-inclusive’ in the way that music streaming services are.
An additional late fee for insufficiently timely payments has also been added, though the exact terms of this have yet to be disclosed. Due to this change, it can be said that this may have a knock-on effect resulting in the subscription fees for these services to increase.
