Last month, Spotify — along with Amazon, Google, and Pandora — started the process of appealing a Copyright Royalty Board ruling that would ultimately increase songwriter and publisher royalties by 44%.
This obviously led to a very large industry uproar, along with being labeled as a war on songwriters.
Personally, I’ve experienced this myself as both an indie artist and as a major label artist. I fully agree to an increase in songwriter royalties. The fight is real for indie artists when it comes to illegal downloads and the terribly low royalty per stream. For a company such as Spotify, worth over twenty billion dollars, to have anything to say about an increase is a bit on the ludicrous side. Spotify pays about $0.006 to $0.0084 per stream to the holder of music rights, and the "holder" can be split among the record label, producers, artists, and songwriters.
Spotify recently released a statement in their attempt to hit back at what they feel is a misrepresentation of what they are actually fighting for in the lawsuit.
Songwriters have been emailing Spotify numerous questions. Here are a couple of answers from the statement that was released:
Why is Spotify appealing?
The CRB rate structure is complex and there were significant flaws in how it was set. 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.
What’s the right way to split the pie?
Music services, artists, songwriters and all other rights holders share the same revenue stream, and it’s natural for everyone to want a bigger piece of that pie. But that cannot come at the expense of continuing to grow the industry via streaming. 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. However, we are willing to support an increase in songwriter royalties provided the license encompasses the right scope of publishing rights.
I wish I could say that I was sold on this part of their statement, but I don’t buy it. The amount that artists receive through streaming is laughable and ridiculous. The amount of time dedication and workmanship that is put into the music that people listen to worldwide is worth far more than what they are getting. Streaming is the direction that we are heading in and the companies that hold all the cards in regards to the amount artists are paid need to get this figured out. Not by the year 2022, but now. Apple took a great stance and from day one has not only agreed to the increase, but they’ve done what they can to show support for it as well.
When you compare what the artist royalties for four million streams equals, compared to what four million plays on terrestrial radio amounts to, it’s not even in the realm of being fair. I would love to know why it has taken so long to raise this much awareness, and why it’s even an issue in the first place? Why are the billionaires making money hand over fist when the artists who are creating the product, and filling those billionaire pockets, are getting paid peanuts?
If this was any other industry this issue would have been dealt with a long time ago, and it’s really time to let go of the stigma that is applied to this industry. The artists deserve more respect and more money for their craft. It’s time to move forward and rally behind this increase in artist royalties, and not look back.