Songwriter Streaming Royalty Rate Settlement Released to Public in Full
The National Music Publishers’ Association (NMPA), the Nashville Songwriters Association International (NSAI) and the Digital Media Association (DiMA) have released their entire “Phonorecords IV” settlement, which, if approved by the Copyright Royalty Board (CRB) judges, will set the parameters for U.S. mechanical streaming royalties for the period of 2023-2027. The settlement was originally filed, in part, on Aug. 31. The decision to release it was voluntary; the agreeing parties were not required to do so.
This settlement between music streamers and the songwriter and publisher communities has been applauded by many of music’s major players, including Sony Music Publishing, Universal Music Publishing Group, Warner Chappell Music, Hipgnosis, Kobalt, Songwriters of North America and others. Frequent opponents of Copyright Royalty Board rulings songwriter George Johnson and the Music Creators of North America trade group have, meanwhile, expressed “extreme dismay” in recent weeks that the trio of organizations may not have released full details that would be crucial to the public.
On Sept. 26, the Copyright Royalty Board similarly asked the three groups representing streamers, publishers and songwriters to certify that what they had provided represented the “full agreement” and that there were no related “clauses” in addition that hadn’t been revealed. The same day, the NMPA, NSAI and DiMA pushed back against Johnson and stated that they worried that releasing the “entire” signed settlement would possibly “have a negative impact on settlement discussions in future proceedings.”
The initial announcement of the settlement stated that for 2023-2027, NMPA, NSAI and DiMA had agreed to introduce a 15.35% headline royalty rate gradually over the course of the five-year term. The NMPA touted this as “the highest royalty rate in the history of streaming anywhere.” Additional details in the full settlement include stipulations for advertising and sponsorship deductions, family plans, and music bundles.
The full agreement is now available on the Copyright Royalty Board’s website.
One source, who often works with music streaming services, previously told Billboard that the Phono IV settlement is good for both sides for a number of reasons. “For one, it lets the industry to continue to grow; and the rates set in a settlement that not only won’t cripple the services but, secondly, it lets them know what the rates payouts [will be] with more certainty. Thirdly, both sides made concessions so that the services got favorable language on bundles and free trials that allows them to get more subscribers into the ecosystem, while giving the songwriters and publishers a little more in pay. All in all, everyone is growing — the services, the labels, the publishers and songwriters and how do we keep that momentum going. This settlement gives us a sustainable music ecosystem.”