The Copyright Royalty Board (CRB) recently ruled a rise up 44% for royalty rates for streaming and other mechanical uses in the US. Spotify and Amazon filed an appeal, asking to revise the ruling: this caused major figures in the music business to issued damning statements on the matter.
Now the streming giant released a blog post in defense of its attempt to scrap a pay rise for songwriters on its service in the United States. The firm says that it believes “songwriters deserve to be paid more”, but argues that there are “significant flaws” in the CRB’s new rate structure. Then it notes:
We are supportive of US effective rates rising to 15% between now and 2022 provided they cover the right scope of publishing rights. But the CRB’s 15% rate doesn’t account for all these rights. For example, it doesn’t consider the cost of rights for videos and lyrics.
That’s because the CRB-approved rate rise will only cover mechanical royalties on streaming services, not stretching to video or lyric content (which is negotiated separately in the US). Whether or not that’s the “right scope” of publishing rights, however, all depends on who you ask.
Spotify also adds:
A key area of focus in our appeal will be the fact that the CRB’s decision makes it very difficult for music services to offer “bundles” of music and non-music offerings. This will hurt consumers who will lose access to them. These bundles are key to attracting first-time music subscribers so we can keep growing the revenue pie for everyone.
The Spotify blog post also states:
The CRB judges set the new publishing rates by assuming that record labels would react by reducing their licensing rates, but their assumption is incorrect.
David Israelite, CEO and President of the National Music Publishers Association, comnented:
Wow. I didn’t think Spotify could sink much lower – but they have. This statement is one giant lie. I’m sure a PR team spent a great deal of time and energy crafting a statement to try to deceive artists and songwriters. They must think artists and songwriters are stupid. They are not. The CRB ordered a rate increase for songwriters. Spotify is against it. It really is that simple.
Dina LaPolt, founder of LaPolt Law and lawyer to artists including Britney Spears and Steven Tyler, responded with similar bluntness, calling Spotify’s blog post “fake news” and “straight up lies”.
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