Daily Management Review

Music Streaming Services In U.S. Will Now Have To Pay More To Artists


01/29/2018




Music Streaming Services In U.S. Will Now Have To Pay More To Artists
Very soon music streaming companies like Spotify and Apple Inc. would have to pay more to songwriters and music publishers in royalty payments. This was decided upon by the U.S. copyright authorities. The increased payments are to be progressively implemented over the next five years. This information was shared by a trade association for music publishers.
 
The current formulas that are put to use for determination of the amount of money from among the revenues of streaming companies that has to be paid to songwriters and the music publishing companies have been altered by the Copyright Royalty Board of the U.S. Library of Congress. Streaming companies hire music publishing companies for collection of licensing fees on their behalf. The new rules were issued in a written decision.
 
Songwriters and music publishers would have to be now given 15.1 percent of the revenues of the streaming companies according to the ruling, said the National Music Publishers Association. the ruling has not yet been made public. The earlier rate of royalty payment was 10.5 percent.
 
NMPA’s proposed rate increase was opposed to be streaming companies like Spotify, Apple, Alphabet Inc, Pandora Media Inc and Amazon.com Inc. and the trade group opposed this opposition of the companies. A trial to this effect was held last year by the board which comprises of three judges.
 
“This is the best mechanical rate scenario for songwriters in U.S. history which is critically important as interactive streaming continues to dominate the market,” said NMPA chief executive David Isrealite in a statement.
 
There were no comments from a Pandora spokeswoman.
 
There were no immediate comments available from representatives of Apple, Alphabet, Spotify and Amazon.
 
On every occasion that a user listens to a song on a streaming service, a fee – known as a “mechanical license,” hah sot be paid.
 
Companies that publish music like Sony/ATV Music Publishing are typically paid the licensing fees who collect the fees on behalf of the recording artists. The music publishing companies retain a commission for the collection. 
 
Under the U.S. laws, instead of the music publishers negotiating rates of loyalty with the streaming services, the rates for these mechanical licenses ae set by the Copyright Royalty Board.
 
(Source:www.reuters.com)






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