Apple’s decision to bring Spotify’s songwriter-royalties appeal into the two companies’ dispute over App Store policies shows that the gloves are truly off. But publishers, too, are continuing to have their say about the appeals filed by Spotify, Amazon, Pandora and Google against the new rates recently set by the US Copyright Royalties Board.
Yesterday, Sony/ATV boss Martin Bandier wrote a letter to songwriters setting out his views on the developments, which (if you need reminding) focus on rates that will see an increase in the statutory mechanical rate for on-demand streaming from 10.5% of services’ revenues in 2018 to 15.1% by 2022. “This was a significant victory for songwriters,” wrote Bandier. “However, the hard-fought win is now under threat as Spotify, Amazon, Google and Pandora have filed notices to appeal these rates. Apple has decided not to appeal. If Spotify and the other streaming services are successful with this appeal, it may result in a reduction in the royalty payments that songwriters will receive from the streaming services.”
Bandier, as you may have guessed, isn’t happy. “I am incredibly disappointed that Spotify and the other companies have chosen to attack songwriters by appealing the long-overdue rate increases. The move flies in the face of everything that I have fought for on behalf of songwriters for fair-market rates,” he wrote. Sony/ATV will be working with the National Music Publishers Association to fight the appeal, but Bandier wants songwriters to make their views known too. “There are no more important or effective voices on this issue than those of songwriters themselves. I therefore urge you to make yourselves heard and to speak out against this appeal.”
Spotify, remember, has also been addressing songwriters directly about the appeal, publishing a blog post earlier this week setting out five points explaining its decision. In that post, Spotify claimed that it *does* support the rates rising to 15% by 2022 “provided they cover the right scope of publishing rights” – videos and lyrics were mentioned as two areas of concern for the streaming service. Spotify also claimed that the CRB rates were set in the expectation that labels “would react by reducing their licensing rates”. The NMPA has since directly contradicted that claim, and other elements of Spotify’s argument, in its own blog post.