Music publishers and streaming services avoid another battle royale by fixing royalties for the next four years

After a grueling, hard-fought, and ultimately victorious 2018-22 streaming fee litigation, the National Music Publishers’ Association, the Nashville Songwriters Association International and the Digital Media Association today announced a final settlement with streaming services involving mechanical streaming -Rates in the US for the years 2023-2027: 15.35%.

The announcement comes as a surprise as the NMPA has been saying for months it will be pushing for a 20% rate for the coming period. However, sources say diversity that concessions have been made on both sides, probably in the form of changes that go beyond the overall price, such as B. the way “bundles” — like discounted streaming subscription prices for family and student plans — and minimum subscription rates are handled.

Sources also say that both sides were keen to avoid another lengthy, distracting and brutally expensive legal battle: The fight over the previous 2018-22 tax period lasted more than three years and cost many millions of dollars in legal and other fees.

While no specifics were given, according to the announcement, the new deal includes a number of changes to other components of the plan, including increases in the minimum cost per subscriber and “Total Content Costs (TCC)” calculations, which reflect the plans services record labels pay. The agreement also modernizes the treatment of “bundles” of products or services that include streaming music and updates how services can provide incentives to attract new subscribers.

These concessions are believed to account for part of the difference between a 15.35% increase and a 20% increase, as they change the numbers on which the payments are calculated. The “bundles,” for example, address the lower subscription costs of student and family plans that offer streaming services, which presumably have been updated in a way that publishing collectives feel is fairer.

Publishers scored a major victory in July when the Copyright Royalty Board upheld its 2018 decision to raise the rate from a previous 11.4% to 15.1% for 2018-22, despite a hard-fought multimillion-dollar Streaming Services Objection.

The announcement reads: “This agreement, which is endorsed by DiMA member companies Amazon, Apple, Google, Pandora and Spotify, as well as the NSAI Board and the NMPA Board, which is comprised of leading independent and major music publishers, represents sure all parties will benefit from the growth of the industry and will be motivated to work together to maximize that growth.”

David Israelite, President and CEO of NMPA said, “This historic settlement is the result of songwriters making themselves heard. Instead of going to court and perpetuating years of conflict, we instead move forward in collaboration with the guaranteed highest rates ever. We thank digital services for coming to the table and treating creators as business partners. Because this is a percentage, we know that as streaming grows exponentially, we will see unprecedented value in songs.”

NSAI Executive Director Bart Herbison said: “This collaborative process will result in higher compensation for songwriters from digital streaming companies and secure our historic 43.8% increase over the previous CRB process. In addition to the rising interest rate dynamics, there are also new structures that help ensure minimum payments.”

Garrett Levin, President and CEO of DiMA, said, “This agreement represents the streaming services’ commitment to providing fans with the best music experiences and growing the streaming ecosystem for the benefit of all stakeholders, including the creative foundation of songwriting. For streaming services, this moment presents an opportunity to pursue new collaborations with publishers and songwriters in the context of economic certainty that will support continued innovation. Perhaps more than anything else, this agreement demonstrates the potential for industry advancement when the parties come around the table for good faith talks.” Music publishers and streaming services avoid another battle royale by fixing royalties for the next four years

Charles Jones

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