Streaming Services to Fight Copyright Royalty Hike

Some of the most powerful names in music streaming, including Google, Spotify and Pandora, say they will challenge a Copyright Royalty Board (CRB) ruling from last year.

The companies were ordered to pay more in mechanical royalties to songwriters and publishers.

In challenging the CRB, the services said that it issued its final decision on the streaming issue “in a manner that raises serious procedural and substantive concerns,” according to a joint statement by spokespeople for Google and Pandora.

“If left to stand, the CRB’s decision harms both music licensees and copyright owners,” the companies said. “Accordingly, we are asking the U.S. Court of Appeals for the D.C. Circuit to review the decision.”

Amazon didn’t sign on to the joint statement and did not respond to a question about whether it also plans to challenge the CRB ruling.

The National Music Publishers Association criticized the move by the streaming companies.

“The CRB’s final determination gave songwriters only their second meaningful rate increase in 110 years,” NMPA head David Israelite said in a statement. “Instead of accepting the CRB’s decision, which still values songs less than their fair market value, Spotify and Amazon have declared war on the songwriting community by appealing that decision.”

Apple Music will not challenge the CRB ruling, a decision Israelite hailed in his statement.

“We thank Apple Music for accepting the CRB decision and continuing its practice of being a friend to songwriters,” he said.

It wasn’t immediately clear on what specific grounds the services plan to challenge the ruling, which said the mechanical royalties — paid when a musical composition is recorded or reproduced — should increase gradually from the current rate of 10.5 percent of revenue to 15.1 percent of revenue by 2022.

However, in a dissent to the CRB’s final decision made public in late November, Judge David R. Strickler said the majority had improperly ordered a rate structure that wasn’t discussed during the course of the case that led to the ruling.

The CRB’s publication of its ruling came just a month after President Trump signed the Music Modernization Act, which will make major changes to how streaming music services such as Google, Pandora and Spotify pay royalties.

The law aims to simplify how digital services pay mechanical royalties by creating a centralized “Mechanical Licensing Collective” to collect royalties and then distribute them to whomever is owed money. As long as digital services pay that entity, they will receive a blanket license that allows them to use any song and immunizes them from infringement lawsuits.

Source: Adweek