New Ruling Raises Music Streaming Royalties for Songwriters on Apple Music, Spotify, and More

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The Copyright Royalty Board this past weekend ruled on a long-running music streaming royalty case in the U.S., favoring songwriters and music publishers in a decision that increases the royalties paid out by streaming music services by more than 40 percent (via The Wall Street Journal).


Now Apple Music, Spotify, Amazon Music Unlimited, Pandora, and other streaming music services will be required to pay 15.1 percent of their revenue to songwriters and publishers, increasing from 10.5 percent. Companies with "less diversified" services like Spotify and Pandora -- which are focused on streaming music -- are predicted to be hit the hardest, while Apple, Google, and Amazon are "unlikely" to be fazed by the ruling.

A federal copyright board has raised the music streaming royalties for songwriters and music publishers by more than 40% to narrow the financial divide separating them from recording labels.

“Songwriters desperately need and deserve the rate increases,” said Bart Herbison, executive director for the Nashville Songwriters Association International, another trade group.

The new royalties will "narrow the financial divide" separating songwriters and publishers from recording labels, although the National Music Publishers' Association estimated labels will still receive $3.82 for every $1 paid to the former group. Before this past weekend's ruling, the trial over music streaming royalties had been ongoing for the past year, igniting after paid streaming music services gained popularity over owning or downloading individual songs and albums.

In terms of record labels, last summer Apple began seeking to reduce the share of revenue record labels get from streaming music as it worked to establish new deals for Apple Music and iTunes. The company did just that in a deal struck with Warner Music Group, achieving a lower rate for the label that includes artists like Ed Sheeran, the Red Hot Chili Peppers, Bruno Mars, and more.

Top Rated Comments

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35 months ago
They should really be taking that out of the chunk the labels are claiming, it's really absurd that labels continue to exist in this day and age.
Score: 9 Votes (Like | Disagree)
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35 months ago

I can’t believe people actually use the free tier on Spotify. The full price is less than the cost of one album per month. It’s crazy good value. $4.99 if you’re a student.

As with everything, it's a value proposition. You and I might value music and think a $10 monthly sub is worth it. Bill and Susan might place music much further down their values list so a free tier is all they want. Steve and Jake might be somewhere in between decide to share a family plan with a group of other like minded friends.

I pay $60 for XBox Live. I think it's a good deal. You may think I'm wasting $60. Value. It's different for everyone.
Score: 4 Votes (Like | Disagree)
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35 months ago
The pain just keeps mounting for Spotify. We’ll see what their subscriber numbers are once their free tier goes away.
Score: 3 Votes (Like | Disagree)
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35 months ago

I can’t believe people actually use the free tier on Spotify. The full price is less than the cost of one album per month. It’s crazy good value. $4.99 if you’re a student.

My uncle with his 499$ headphones and a BMW for each of his daughters refuses to pay 99 cent for iCloud storage. People are weird when it comes to digital goods
Score: 3 Votes (Like | Disagree)
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35 months ago

I’m somewhat conflicted on streaming. While streaming has conveniences and owning all your music can get expensive, I’ve seen it happen more than once where a song on my playlist disappeared from Amazon Music. It was still on the list, but I got an error saying that this content was no longer available. I guess you still get a huge library to chose from, but knowing something can just disappear changed my perspective. I’m back to buying more music, especially from the artists I really like.

THIS. This happens to me all the time with Apple Music... especially with tracks that are more rare (b-sides, unreleased, etc) are more prone to be removed from the service. What annoys me about Apple Music (and others) is the heavy focus on promoting and showcasing mostly radio friendly pop, hip hop, etc. Just extremely commercialized.
Score: 2 Votes (Like | Disagree)
Avatar
35 months ago
I’m somewhat conflicted on streaming. While streaming has conveniences and owning all your music can get expensive, I’ve seen it happen more than once where a song on my playlist disappeared from Amazon Music. It was still on the list, but I got an error saying that this content was no longer available. I guess you still get a huge library to chose from, but knowing something can just disappear changed my perspective. I’m back to buying more music, especially from the artists I really like.
Score: 1 Votes (Like | Disagree)

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