Spotify, Amazon, and Google Appeal A Huge Spike In Royalties That Could End Free Music

US Copyright Royalty Board

Spotify, Pandora, Google and Amazon have joined together to appeal an imposition from the US Copyright Royalty Board that would rise the cost of royalties by 44 per cent. If the appeal is not approved, the music streaming services would be forced to charge the millions of free account holders for services.

A joint statement from Spotify, Pandora and Google has been released:

 “The Copyright Royalty Board (CRB), in a split decision, recently issued the US mechanical statutory rates in a manner that raises serious procedural and substantive concerns.”

Apple is also on the list of music streaming sites that would be affected by the royalties increase. The company was not included in the statement  in part because Apple Music does not offer free music streaming, only free trials.

The statement also included:

“If left to stand, the CRB’s decision harms both music licensees and copyright owners. Accordingly, we are asking the US Court of Appeals for the DC Circuit to review the decision.”

Interestingly enough, the CRB has already decided to hike up statutory rates by 44 per cent, but the pronouncement was not published until February 2019. By law, the companies being imposed  have 30 days from the CRB’s publication date to appeal- which is what’s happening now.

The exact proposal is a 43.8% increase over the course of 5 years, in what would be a demand to the aforementioned streaming companies. The increase also calculates the monthly subscriptions to match and rise immediately. That’s the point where these companies risk losing millions of members. 

For songwriters, the CRB’s decision would also wreak havoc. In an inevitable chain of events, the digital services would also charge songwriters and copyright holders to stream their work. That charge would be an addition to what they have already been paying– prices that have been increasing for years.

A statement has been provided to Variety magazine from the CEO of the US National Music Publisher’s Association:

David Israelite states, “When the Music Modernization Act became law, there was hope it signaled a new day of improved relations between digital music services and songwriters. That hope was snuffed out today when Spotify and Amazon decided to sue songwriters in a shameful attempt to cut their payments by nearly one-third.

No amount of insincere and hollow public relations gestures such as throwing parties or buying billboards of congratulations or naming songwriters ‘geniuses’ can hide the fact that these big tech bullies do not respect or value the songwriters who make their businesses possible.”

As for now, the appeal is just a pain staking waiting game.