Spotify, Google, Pandora and Amazon have filed notices they intend to appeal the Copyright Royalty Board’s (CRB) rate determinations finalized last month that would boost digital services’ payments to music songwriters and publishers by 44 percent over a four-year term.
The new mechanical statutory rates cover 2018 to 2022 and include a headline rate increase from 10.5 percent of revenue to 15.1 percent of revenue. The decision came in a 2-1 vote last year that was celebrated by songwriters and publishers, then finalized in February following review by the Register of the Copyright Office.
So far, the digital services have only filed a notice that they are appealing in a proceeding that will be heard by the D.C. Court of Appeals. However, the music services have yet to file the actual appeal, which would say on what grounds or what aspect of the CRB’s final ruling they are basing their appeal on.
This marks the first time that the Section 115 rate determinations for music publishing rates has been appealed.
On Feb. 5, George Johnson, a Nashville-based indie songwriter who participates in most of the Copyright Royalty Board proceedings, also filed a notice of his intent to appeal.
In a statement on Thursday (March 7), Google, Pandora and Spotify said jointly, “The Copyright Royalty Board (CRB), in a split decision, recently issued the U.S. mechanical statutory rates in a manner that raises serious procedural and substantive concerns. If left to stand, the CRB’s decision harms both music licensees and copyright owners. Accordingly, we are asking the U.S. Court of Appeals for the D.C. Circuit to review the decision.”
Amazon had not responded to a request for comment at time of publishing. All four companies filed with the court separately. Apple Music is the only major streaming service who did not file notice it plans to appeal.
Supporters of the CRB’s new rates, National Music Publishers Association (NMPA) and Nashville Songwriters Association International (NSAI), issued their own statements on Thursday slamming the tech companies’ plans to appeal.
“When the Music Modernization Act became law, there was hope it signaled a new day of improved relations between digital music services and songwriters,” said NMPA President and CEO David Israelite. “That hope was snuffed out today when Spotify and Amazon decided to sue songwriters in a shameful attempt to cut their payments by nearly one-third.”
He continued, “The Copyright Royalty Board (CRB) spent two years reading thousands of pages of briefs and hearing from dozens of witnesses while both sides spent tens of millions of dollars on attorneys arguing over the worth of songs to the giant technology companies who run streaming services. The CRB’s final determination gave songwriters only their second meaningful rate increase in 110 years. 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.
“No amount of insincere and hollow public relations gestures such as throwing parties or buying billboards of congratulations or naming songwriters ‘geniuses’ can hide the fact that these big tech bullies do not respect or value the songwriters who make their businesses possible.
“We thank Apple Music for accepting the CRB decision and continuing its practice of being a friend to songwriters. While Spotify and Amazon surely hope this will play out in a quiet appellate courtroom, every songwriter and every fan of music should stand up and take notice. We will fight with every available resource to protect the CRB’s decision.”
Added NSAI Executive Director Bart Herbison: “It is unfortunate that Amazon and Spotify decided to file an appeal on the CRB’s decision to pay American songwriters higher digital mechanical royalties. Many songwriters have found it difficult to stay in the profession in the era of streaming music. You cannot feed a family when you earn hundreds of dollars for millions of streams.
“Spotify specifically continues to try and depress royalties to songwriters around the globe as illustrated by their recent moves in India. Trying to work together as partners toward a robust future in the digital music era is difficult when any streaming company fails to recognize the value of a songwriter’s contribution to their business.”