State Champ Radio National Music Publishers' Association
Even if Spotify’s new royalty model won’t pay artists’ whose tracks don’t hit 1,000 streams in a year, songwriters will still earn money from those plays — for now, at least.
As Billboard reported last month, Spotify is planning to implement three changes to its royalty model early next year that would affect the lowest-streaming acts, non-music noise tracks and distributors and labels committing fraud. Under this new scheme, more than two-thirds of the tracks uploaded to that platform will be eligible to receive royalties — but that, notably, that will only impact about 0.5% of the royalty pool.
Nevertheless, this has sparked debate around the music community, with some questioning the ethics of not paying artists for whatever streams they garnered simply because they were not popular enough. Others supported the plan, citing the paltry sums an artist would be making for under 1,000 annual streams anyway (which amounts to about five cents). Many also believe this new rule could provide alleviate the issue of the royalty pool being divided among the exponentially-growing number of songs on Spotify’s platform, which likely dilutes the amount of money flowing to career artists.
But this change to Spotify’s royalty model does not affect songwriters and publishers payments at all, a source close to the company confirmed to Billboard. It just affects those who are involved in the master recording copyright.
For the uninitiated, there are two copyrights associated with every song released: the underlying musical work (often also called the “composition” or “song”) copyright, which protects the lyrics and melodies written by songwriters, and the master recording (also called the “sound recording”) copyright, which protects the artists’ one specific recording of that musical work.
In the United States, the royalty rates that songwriters and publishers can charge for the composition side of things are controlled by a government entity known as the Copyright Royalty Board. Every five years, the statutory rate structure for songwriters and publishers is renegotiated with the National Music Publishers’ Association (NMPA) as well as Nashville Songwriters Association International (NSAI) and other groups and individuals who represent the music industry’s fight to raise rates. (Other territories often base their publishing royalty rates off of those set in the U.S.)
Not everyone agrees on what specific rate structure they want, which has led to some infighting, but they all unite behind one principle: songwriters should earn more money. In fact, publishing earns just a fraction what the recorded music side does on streaming overall, the rates are far from equal. Many in the music business wish the current Copyright Royalty Board system could be abolished, freeing songwriters and publishers to negotiate rates in a free market without government interference, but this is unlikely to change, given it would require an act of Congress to overhaul an over one hundred year old law and services, many of which are owned by some of the world’s largest technology companies, would certainly lobby against it.
Those whose interests lie on the recording side, like record labels, get to negotiate directly with streaming services to set their royalty structure. This is why the streaming payment system can be experimented with in the ways seen now through Spotify’s recent changes, as well as Deezer’s new “artist-centric” payment plan, created with UMG. Overall, the publishing side of the business is handcuffed to whatever the current ruling says.
The system of streaming royalty payments for publishers and songwriters for 2023-2027 (also known as “phonorecords IV” “phono IV” or “CRB IV”), the current five year period, has already been set. National Music Publishers’ Association president and CEO David Israelite says it is possible that the next five year period, phono V, could be reconfigured to more closely mirror what is happening on the master recording side but that determination process won’t begin until about early 2026.
“We will have the benefit of watching how this plays out for a while before we ever have to address it, but it’s way too early to speculate what we might do,” says Israelite. Still, he adds, “it is horrible that we are locked in the statutory rate structure where we have no flexibility other than these five year windows but that is our situation… It’s a very different conversation than one company sitting down with another company and agreeing what they want to do [like it happens on the master side]. We are asking a court through litigation or an agreement to set a structure that applies to everyone and to build consensus around that. It’s much harder to change.”
Reps. Ted W. Lieu (D-CA) and Ben Cline (R-VA) have joined together to re-launch and co-chair the bipartisan Congressional Songwriters Caucus to focus on advancing policies that support independent songwriters and strengthen copyright protections.
The new caucus has support from the Recording Academy, Nashville Songwriters Association International, BMI, ASCAP and the National Music Publishers’ Association (NMPA), according to a press release. No specific names of independent songwriters were included in the release, and a representative for Lieu has not responded to Billboard’s requests for more information.
The caucus was originally formed in 2003 by Sen. Marsha Blackburn (R-TN) when she served as a House representative for Tennessee. According to her website, part of her focus at the time was cracking down on China’s intellectual property theft and how that affected songwriters and other creatives.
The interests of musicians is also represented in Congress with the Recording Arts and Sciences Congressional Caucus, which was established in 2005 and continues today, helmed by Speaker of the House Kevin McCarthy (R-CA) and new Democratic Leader Hakeem Jeffries (D-NY).
Hailing from Southern California, Rep. Lieu says he understands first hand how “talented songwriters… contribute to so much of our culture and society. I’m thrilled to join Congressman Cline in co-chairing the new bipartisan Congressional Songwriter’s Caucus, which will work to support America’s brilliant songwriters by ensuring they can protect their work and make a living doing what they love. Music contributes so much to our way of life, and we must ensure those creating it are compensated fairly. I’m grateful to the numerous songwriter advocacy organizations who’ve partnered with us on the creation of this caucus and look forward to working together to support our artists.”
“Making art, specifically music, is a powerful way to leave a mark on the world,” says Rep. Cline. “It’s a part of our everyday lives, from what we listen to on our commutes in the morning, to the music we select for our most important life events, such as birthdays, weddings, and funerals. But today’s modern music landscape can make it more difficult for certain artists, especially independent songwriters, to make a living. That is why I’m proud to co-chair the Congressional Songwriters Caucus, which will play an important role in promoting the songwriting community by working to ensure the creative rights of songwriters are protected.”
“It All Begins With A Song,” says Bart Herbison, executive director of NSAI. “the entire music ecosystem. Since the Songwriters Caucus was initially launched 20 years ago, technology has completely changed the way music is delivered. American songwriters still face challenges in the digital era and we are very grateful to Congressmen Cline and Lieu for their bipartisan support.”
“On behalf of our over one million affiliates, I’d like to thank Representatives Cline and Lieu for co-chairing the Congressional Songwriters Caucus. Both have always been champions for creators, and we are in excellent hands with them leading the charge for songwriters and composers on the Hill. We stand ready to work with them to ensure creators are supported by strong copyright law and that they are fairly compensated for their work,” adds Mike O’Neill, president and CEO of BMI.
“Songwriters are the foundation of America’s vibrant music industry, and we appreciate Representatives Cline and Lieu recognizing the importance of ensuring we have champions in Congress. As technology transforms the music landscape, ASCAP looks forward to engaging with members of the Congressional Songwriters’ Caucus to protect the rights of American music creators and defend the value of their hard work and creativity,” says Paul Williams, president of ASCAP.
“We applaud Representatives Cline and Lieu for leading the Congressional Songwriters Caucus and we are excited about today’s launch. NMPA is the leading advocate for music publishers and their songwriter partners and we greatly look forward to working with the Caucus to advance policy interests that will protect creators and ensure that songwriters thrive,” says NMPA president and CEO David Israelite.
“The Recording Academy is proud to support the re-launch of the Congressional Songwriters Caucus which helps connect songwriters and composers with lawmakers to ensure that their unique interests are heard and understood. We are grateful to the new Caucus Co-Chairs, Representatives Ben Cline and Ted Lieu, for their support and leadership and we look forward to working with stakeholders across the songwriter community to advance the Caucus forward,” says Recording Academy CEO Harvey Mason Jr.
During the National Music Publishers’ Association (NMPA) annual meeting on Wednesday (June 14), the trade organization said it calculated total U.S. publishing revenue at $5.6 billion in 2022, up from $4.7 billion in 2021 — a more than 19% increase year over year.
During his presentation at the meeting, held at Alice Tully Hall at Lincoln Center in New York, NMPA president/CEO David Israelite further noted that $5.6 billion figure does not include monies likely owed to publishers after the Copyright Royalty Board’s recent ruling upholding a rate increase for streaming services, rising gradually from 11.4% to 15.1% of service revenue for the 2018-2022 period. Once that increase is retroactively applied later this year, publishers’ should see a substantial additional payday.
Based on revenues earned in January and February 2023, compared to the same two months from 2022, Israelite said publishing earnings are up 27% so far this year. That’s due to a number of factors, including an increased royalty rate from streaming services that’s now set at 15.1% of revenue in 2023 and will increase gradually to 15.35% in 2027. Streaming services raising their subscription prices have also contributed to higher revenues, as well as growing diversity in publishers’ revenue streams.
Since 2014, when U.S. publishers earned $2.2 billion, annual revenues have grown more than 160% overall, according to the NMPA.
Breaking down revenue categories, performance royalties made up 48% of revenue — dropping below 50% for the first time. That fall in percentage, however, was “because the growth in other categories has been so significant, specifically with regard to synchronization,” Israelite said. Synch revenues made up 26.07% of earnings, mechanical 20.27% and other 5.37%.
Elsewhere during the event, NMPA executive vp/general counsel Danielle Aguirre announced that the organization had also distributed $66 million to its members from legal recoveries and settlements last year. “This is equal to a 456% average return on your dues,” she said, adding that the amount collected brings the NMPA’s all-time legal recovery number to $1.2 billion.
In a blockbuster announcement, Aguirre also revealed that NMPA members were suing Twitter over allegations of widespread copyright infringement, with dozens of music publishers seeking hundreds of millions in damages for infringing over 1,700 songs. If the claims are proven, the social media giant could be forced to pay as much as $255 million in damages.
Apart from Israelite’s state of the union address, which provided publishers with key analysis on the successes and pitfalls of the previous year, the meeting also doled out awards to several individuals. Among them, the organization honored RIAA chairman/CEO Mitch Glazier with the NMPA Industry Legacy Award, Senator Dick Durbin of Illinois with the NMPA President’s Award for his leadership in passing the Music Modernization Act and the CASE Act, Brandi Carlile with the Songwriter Icon Award and Ashley Gorley with the first-ever NMPA Non-Performing Songwriter Icon Award.
Coming out to perform in honor of Carlile was Allison Russell, who performed Carlile’s “This Time Tomorrow”; and Brandy Clark, who performed Carlile’s “You and Me on the Rock.” Coming out for Gorley was special guest Luke Bryan, who performed two Gorley-penned hits: “What Make You Country” and “Play It Again.”
This story is developing.
The National Music Publishers’ Association says its members are suing Twitter over allegations of widespread copyright infringement and seeking hundreds of millions in damages, telling the Elon Musk-owned site it can no longer “refuse to pay songwriters and music publishers.”
In the lawsuit, which the group plans to announce during its annual meeting Wednesday (June 14), dozens of music publishers allege that Twitter had infringed more than 1,700 different songs — a claim that, if proven, could put the social media giant on the hook for as much as $255 million in damages.
“Twitter profits handsomely from its infringement of publishers’ repertoires of musical compositions,” the music companies write in their complaint, which was obtained by Billboard. “Twitter’s unlawful conduct has caused and continues to cause substantial and irreparable harm to Publishers, their songwriter clients, and the entire music ecosystem.”
Twitter did not respond to immediate request for comment.
The plaintiffs named in the lawsuit, set to be filed in Tennessee federal court, include Concord, UMPG, peermusic, ABKCO Music, Anthem Entertainment, Big Machine Music, BMG Rights Management, Hipgnosis Songs Group, Kobalt Music Publishing America, Mayimba Music, Reservoir Media Management, Sony Music Publishing, Spirit Music Group, The Royalty Network, Ultra Music Publishing, Warner Chappell Music, and Wixen Music Publishing.
The announcement that the NMPA would be pursuing legal action against Twitter shouldn’t come as a total surprise. In a February speech at the Association of Independent Music Publishers (AIMP) summit, NMPA president and CEO David Israelite called Twitter his “top legal focus” this year. He warned that the company was “hiding behind” the Digital Millenium Copyright Act – the federal law that limits how websites like Twitter can be sued over copyright infringement by their users.
In a statement on Wednesday, Israelite echoed that threat, saying that Twitter could no longer “hide behind the DMCA and refuse to pay songwriters and music publishers.”
“Twitter stands alone as the largest social media platform that has completely refused to license the millions of songs on its service,” Israelite said in a statement. “Twitter knows full well that music is leaked, launched, and streamed by billions of people every day on its platform.”
The DMCA provides websites like Twitter with a legal immunity — a “safe harbor” — against copyright lawsuits over material uploaded by their users, so long as they promptly remove infringing content and ban repeated violators from the platform. But in their new lawsuit, the publishers allege that Twitter failed to do either, meaning the site has legally forfeited the DMCA’s protections.
“Twitter routinely ignores known repeat infringers and known infringements, refusing to take simple steps that are available to Twitter to stop these specific instances of infringement of which it is aware,” the publishers wrote.
The NMPA annual meeting each year is known to feature at least one bombshell announcement from Israelite. Last year, the NMPA launched a legal action against over a hundred different apps that skim music from digital services without obtaining licenses, sent cease and desist notices to Apple and Google app stores, and filed a copyright infringement lawsuit against music video-making app Vinkle. In 2021, Israelite announced $200 million copyright infringement lawsuit against Roblox for hosting thousands of unlicensed songs within the game’s library.
The NMPA’s public grievances with Twitter date back to at least April 2021, when a Billboard published a guest column, co-penned by Israelite and RIAA chief Mitch Glazier. In it, the two leaders called for social media platform to license music and noted that in the last year music creators had sent more than 2 million notices to Twitter of unlicensed and infringing appearances of copyrighted music on the platform, more than 200,000 of which were of unreleased songs. “The company’s response to date has been totally inadequate,” the article lamented. It went on to suggest three ways for Twitter to address the grievances the music business has had with its operations: “licensing music and pay music creators like others do,” “better content protection tools,” and “stop demanding exorbitant payments from creators for content protection.”
Since Jack Dorsey stepped down from Twitter in November 2021, the stability of the company has been in constant flux. By the time Musk bought the company and assumed the role of CEO in October 2022, Twitter’s future seemed even more uncertain amid Musk’s controversial leadership, widespread cost cutting measures, and restructuring of the company. Since Dorsey’s departure, Israelite has taken to the platform to express his hope that subsequent chiefs like Parag Agrawal, Musk and now Linda Yaccarino would “finally” “take a new approach” with licensing music.
But in Wednesday’s lawsuit, the publishers said things had only gotten worse: “Twitter’s change in ownership in October 2022 has not led to improvements in how it acts with respect to copyright. On the contrary, Twitter’s internal affairs regarding matters pertinent to this case are in disarray.”
Licensing for games, social media, and other applications is quickly becoming a major component of music publishers’ income. At last year’s annual meeting, NMPA announced that licensing from new revenue streams — like Twitch, Roblox, Peloton and others — now account for 29.11% of music publishers’ income, something that is expected to only rise over time. This has come with the success of the NMPA’s aggressive legal agenda in recent years, and has helped publishers diversify their income from streaming, which is strictly regulated in the U.S. by the Copyright Royalty Board.
In the lawsuit against Twitter, the publishers noted that TikTok, Facebook, Instagram, YouTube, and Snapchat had all entered into such broader licensing deals, enabling their users to use copyrighted music while still compensating songwriters. Twitter, they wrote, cannot not continue to be the exception.
“Twitter is seizing for itself an artificial competitive advantage against companies that are not violating copyright law, undercutting existing markets, cheapening the value of music, and undermining Publishers’ well-established business models,” lawyers for the publishers wrote.
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