Publishers and composers have complained about streaming royalties for years, claiming that historically, they make up around one-fifth of what labels and recording artists make. Variety cited sources as saying that, to put it gently, all parties were keen to avoid another long, disruptive, and incredibly costly court battle: The court battle over the preceding rate period of 2018–22 lasted for more than three years and cost millions of dollars in expenses.
The statement is unexpected because the NMPA has been advocating for a 20% rate for the next term for months. Sources tell that compromises were made on both sides, most likely in the shape of changes to "bundles" (such as lower streaming subscription prices for family and student plans) and per-subscriber minimums, which go beyond the headline pricing. The new agreement makes a number of pricing modifications, though specifics were not given. These changes include raising the per-subscriber minimums and changing the "Total Content Costs (TCC)" computations to include the fees that services pay to record labels. The agreement also modifies how providers can provide incentives to draw in new users and modernizes the regulation of "bundles" of goods or services that include streaming music.
“This agreement, supported by DiMA member companies, Amazon, Apple, Google, Pandora, and Spotify, as well as NSAI’s Board of Directors, and the NMPA Board which is comprised of leading independent and major music publishers, ensures that all parties will benefit from the growth of the industry and will be motivated to work together to maximize that growth.”
The National Music Publishers' Association, the Nashville Songwriters Association International, and the Digital Media Association today announced a settlement with streaming services for specific mechanical streaming rates in the United States for the years 2023–2027: 15.35%. This comes after a long, arduous, and ultimately successful legal battle over streaming rates for the years 2018–22.
“This historic settlement is the result of songwriters making their voices heard. Instead of going to trial and continuing years of conflict, we instead move forward in collaboration with the highest rates ever, guaranteed. We thank the digital services for coming to the table and treating creators as business partners. Critically, since this is a percentage rate, we know that as streaming continues to grow exponentially, we will see unprecedented value of songs.” - NMPA President
July
Originally decided in 2018, the new headline rate sees an increase from 10.5% to 15.1% over the past four years, from 2018 - 2022. Streaming behemoths, which include services like Pandora and Google as well, argue that the move would interfere with their business models because they already pay billions in royalties. While the 44% rise in royalties is good news for musicians, publishers will only be able to get a small proportion of label income (TCC rate) due to the limitation.