Songwriters Collect Big Against Music Streaming Services

After a massive dispute, streaming services will now be required to pay more for the music they play. The Copyright Royalty Board ruled to increase royalty payments to songwriters and music publishers from music streaming companies by 43.8 percent (they go into effect for interactive streaming and limited download services for the years 2018-2022). This jump is the biggest rate increase to date. This decision will require streaming services to pay 15.1 percent of their revenue to songwriters and publishers (up from 10.5 percent). 

The action involved songwriters and music publishers against five large technology companies, who were seeking to reduce the low rate of royalties they currently pay to songwriters for using their music on their streaming services. The ruling affects only the mechanical license, which includes albums, CDs and downloads. The ruling also instigates a late fee, which means streaming companies must pay their royalty rates on time or face an 18 percent interest fee annually. Before this legislation, artists and record labels were left to create their own deals with streaming services, and oftentimes, they were limited by a content cost cap or a low percentage. 

This decision was largely influenced by upcoming federal legislation known as the Music Modernization Act, which seeks to overhaul the digital mechanical licensing process.