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Is Spotify really suing songwriters???

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Published by The Supreme Team on March 4, 2020



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How did it all start: It all starting in March 2017, so exactly 3 years now, when the National Music Publishers Association and the Nashville Songwriters Association International presented their case against streaming platforms (Apple Music, Spotify, Amazon, Pandora and Google) to increase the royalty paid to songwriters. The proposition suggested a per-stream rate rather than the percentage given per streaming service revenue that is in place now. This was denied.Then, in 2018, the CRB came to a decision: songwriter’s royalties should be increased by 44%.“The Copyright Royalty Board (CRB), in a split decision, recently issued the U.S. mechanical statutory rates in a manner that raises serious procedural and substantive concerns. If left to stand, the CRB’s decision harms both music licensees and copyright owners. Accordingly, we are asking the U.S. Court of Appeals for the D.C. Circuit to review the decision.” – Spotify Google and Pandora.So, who is the CRB?The Copyright Royalty Board (CRB) is comprised of three federal judges chosen by the Library of Congress. They are mandated by the US law to set the rate streaming platforms pay for mechanical licenses to songwriters and music publishers for each song streamed.

Picture taken from the CRB website

Theses streaming platforms had 30 days after the ruling to appeal, which they did. Actually, only Spotify, Amazon and Google appealed. The increase royalty rate is what is concerning these services. They are NOT suing the songwriters, like Apple wanted to insinuate, they’re appealing the CRB’s decision to increase these rates.The CRB decision would mean an increase of 44% in fees in the next 5 years for subscribers, so I guess they are trying to reduce those fees for us. In fact, in a blog post Spotify said it supported the rate increase but they would like to better define some terms like ‘‘limited Offerings’’ and ‘‘Limited downloads’’. What these platforms are saying, is that the CRB came with something too broad, and has nothing to do with the songwriters royalties.

Let’s face it, Spotify’s revenue is pratically all going in royalties. After being profitable the first 9 months, they ended the year 2019 with net loss, even after making 7 billion dollars in sales. All their profit goes into paying royalties. In fact, they want to make a money pool where income from advertising won’t be shared with music publishers.You might be wondering why Apple didn’t team up with them. Well, Apple will benefit from the decision rendered after the appeal made by Spotify, Amazon and Apple, minus the expenses. Smart move.My humble opinion:I think, after the CRB gave them 30 days to appeal, they needed a good reason why to appeal. So, they might’ve been some points that where not defined enough, but the real goal is to change the decision to somewhat their favor. It’s true that any increase in expenses will go to the subscribers. Will that change the consumer’s mind? No, I don’t think so. Streaming is increasing in popularity and physical album sales are going down.Songwriters deserve their pay, living on a few hundred dollars every million streams of a song is not enough. Every creator has to protect their work and be fairly compensated. Also, there will be more platforms that will rise in the future, and healthy competition is good for the market. Unless, of course, they team up to keep the prices at a certain level.What do you think? Is Apple really the good guy for not suing? Are streaming services wrong for appealing? Will you stop streaming if the subscription prices are too high?I’d like to hear your thoughts on this.

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