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NMPA boss hopeful streaming rate increases will stay despite appeals court forcing a review

By | Published on Thursday 13 August 2020

National Music Publishers Association

The boss of the US National Music Publishers Association has said that he is hopeful that the US Copyright Royalty Board being forced to rethink its ruling on streaming royalty rates won’t affect the rate increase said board previously instigated. He also again criticised the streaming services – Spotify and Amazon in particular – for pushing for the rethink.

An appeals court in Washington last week confirmed it was forcing the CRB to reconsider its most recent review of the rates paid by streaming services under the compulsory licence that covers the mechanical copying of songs in the US.

That review, of course, increased the basic rates for streaming, ultimately pushing the percentage share of streaming revenue allocated to the song from 10.5% to 15.1% over a number of years, which equates to a 44% increase overall.

A number of streaming services appealed that CRB ruling, resulting in last week’s appeals court decision ordering the rethink. The full details of that decision have now been published, and – as expected – most of the criticisms contained within it relate to the process the CRB went through, rather than the specific changes it ultimately made.

There is also specific criticism of how the CRB dealt with a thing called the ‘total content cost’, a separate royalty metric that co-exists with the percentage-of-total-revenue rates.

With that in mind – while the music publishers remain furious with Spotify et al for forcing any kind of review – NMPA boss David Israelite was keen to stress in a statement to media that the appeals court “supported the rate increase granted by the CRB to music publishers and songwriters, agreeing that writers have been underpaid [to date]”.

Noting some of the specific aspects of the original CRB ruling that the appeals court said required better explanation, Israelite added “we believe these things are easily done by the CRB”. And he again stressed that those complexities, and the issues raised with the ‘total content cost’, have “nothing to do with the 44% rate increase”.

He then stated: “We are heartened that the court understands and supports the fact that songwriters are grossly underpaid by streaming services. It is shameful that Spotify and Amazon have now spent millions of dollars – money which could’ve been paid to songwriters – on attempting to deny them a raise based on technicalities”.

Over on the other side of the debate, the trade body for the digital firms – the Digital Media Association – told Law360: “Despite our differences, publishers, songwriters and streaming services deserve a fair hearing, and we thank the court for its work”.

While the now impending re-review of streaming royalties by the CRB may be mainly dealing with rather tedious complexities – and may well not impact on the basic rate increase – with the streaming services, and Spotify in particular, under increased fire from songwriters and some artists, we can expect said re-review to create some real PR headaches for the digital services.