After a massive dispute, streaming services will now be
required to pay more for the music they play.
The Copyright Royalty Board ruled to increase royalty payments to songwriters and music publishers from music streaming companies by 43.8 percent (they go into effect for interactive streaming and limited download services for the years 2018-2022). This jump is the biggest rate increase to date. This decision will require streaming services to pay 15.1 percent of their revenue to songwriters and publishers (up from 10.5 percent).
The action involved songwriters and music publishers
against five large technology companies, who were seeking to reduce the low
rate of royalties they currently pay to songwriters for using their music on
their streaming services. The ruling affects only the mechanical license, which includes albums, CDs and downloads. The ruling also instigates a late fee, which means streaming companies must pay their royalty rates on time or face an 18 percent interest fee annually. Before this legislation, artists and record labels were left to create their own deals with streaming services, and oftentimes, they were limited by a content cost cap or a low percentage.
against five large technology companies, who were seeking to reduce the low
rate of royalties they currently pay to songwriters for using their music on
their streaming services. The ruling affects only the mechanical license, which includes albums, CDs and downloads. The ruling also instigates a late fee, which means streaming companies must pay their royalty rates on time or face an 18 percent interest fee annually. Before this legislation, artists and record labels were left to create their own deals with streaming services, and oftentimes, they were limited by a content cost cap or a low percentage.
This decision was largely influenced by upcoming federal
legislation known as the Music Modernization Act, which seeks to overhaul the
digital mechanical licensing process.
legislation known as the Music Modernization Act, which seeks to overhaul the
digital mechanical licensing process.