What if music-streaming services in the US paid a statutory rate of $0.00091 per stream in songwriting royalties, regardless of whether the stream came from a paying or free user?
That’s one of the suggestions filed as part of the US Copyright Royalty Board’s consultation on streaming rates for the 2018-2022 period, which is in its early stages. The source of the suggestion is newsworthy though: Apple.
The story was broken by the New York Times, which like other media, has picked up on the fact that moving from the current system where ‘interactive’ streaming services pay a negotiated percentage of their revenues to publishers to a statutory rate would have the biggest impact on services with a free tier like Apple Music’s biggest rival, Spotify.
“An interactive stream has an inherent value, regardless of the business model a service provider chooses,” is how Apple’s CRB submission worded it.
Cue suggestions of shenanigans: a company with deep cash reserves and a subscription-only service trying to nobble a rival whose freemium model is the biggest challenger to its potential dominance.
And yet regardless of the source or motives, there is an important debate to be had not just about statutory rates vs percentage-based publishing royalties, but also about the balance between labels and publishers when it comes to streaming payouts.
Suggesting that freemium rivals should pay 9.1 cents per 100 streams is as much about sowing more dissent / sparking more debate (delete according to personal views) within publishing and songwriting communities already grappling with the recent mechanical-royalties lawsuits against Spotify, and its settlement deal with the NMPA.
Spotify and other services will be making their own submissions to the CRB, which will be made public. This will be an exceptionally-delicate argument for Spotify in particular, which wants as much as Apple to be seen as a friend to songwriters rather than a foe.