Major publishers tackle streaming services over songwriter royalties


Executives from all three major publishers have been talking about streaming services and licensing, as part of Synchtank’s ongoing report into the publishing market. Given the swirl of conjecture about whether they are hampered from advocating more strongly for higher rates by their parent companies, that’s a notable moment.

“The biggest challenge that I see right now is the fact that we can’t have a sensible negotiation with a lot of the services in the US,” said Sony Music Publishing’s Antony Bebawi.

“The licensing system in that market is very complex, and it is consistently used by the services to try and reduce the amounts of money that they pay to songwriters. And to try to reduce it to a level that’s below what’s being achieved in free market negotiations outside of the US.”

“What DSPs have to recognize is that music has been a massive driver of their valuations beyond the P&L on a service level and it’s been the songwriters and artists who have really been at the forefront of allowing music innovation for these companies,” added Universal Music Publishing Group’s Marc Cimino.

“Where would the services be without disaggregation of songs on albums? That has been the single biggest factor in creating a difficult situation for a lot of songwriters and when we are forced into a laborious negotiation or CRB process for what is essentially a rounding error for these companies. It’s maddening.”

Finally: “We continue to push for favorable deals and terms with all of the major streaming services and tech companies. We also work with great partners like the National Music Publishers’ Association to advocate on our songwriters’ behalf,” said Warner Chappell’s Guy Moot. “This will be especially important over the next few months as we head into the upcoming CRB hearing with DSPs pushing for the lowest US mechanical rates in history.”

None of this is surprising, as such, but it does reflect the nature of the debate about publishing streaming royalties in the US, which focuses on the rates that the DSPs pay and the lobbying / CRB processes around that, rather than any shift in weight between recordings (labels) and songs (publishers) – something that has been more prominent in the UK’s public debates about the streaming economy.

The label/publisher tensions are explored in Synchtank’s report, however. “We would like to see a much more equitable split between the publishing and record business. I think that conflict of interest between records and publishing is always going to be a problem for the majors,” said Downtown Music Services’ Mike Smith.

“You would think that the recorded music company that owns the first-, second- or third-biggest publishing company in the world would be leaving enough room in the negotiation for the songwriter to be able to be rewarded properly,” added Hipgnosis’s Merck Mercuriadis.

However, the report also quotes NMPA boss David Israelite’s defence of the major publishers, noting that they foot much of the bills for his body’s work during the CRB rate-setting processes.

“It’s the major publishers that are there on the ground level in that fight,” he said. “I think publishers need to do a better job of engaging their own songwriters, and also publicly, in explaining how this industry now works.”

Written by: Stuart Dredge