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Amazon Music is updating its “Unlimited” subscription tier to give subscribers in the U.S., UK and Canada access to audiobooks from Audible’s library of one million-plus titles, the company announced on Tuesday (Nov. 19).
With the new perk, Amazon Music Unlimited follows in the footsteps of Spotify, which revamped its subscription offerings earlier this year to include a bundle of songs and audiobooks together. Though Spotify angered songwriters and publishers by arguing it didn’t need to pay the full mechanical royalty rate since it offered multiple royalty-earning services in one, it appears that Amazon Music will work with publishers to determine new rates privately. According to a statement by the National Music Publishers’ Association (NMPA), the trade organization is “optimistic” about Amazon’s new offering and is “engaged” with the company in a “respectful and productive way” to find a compensation model for publishers that “will not decrease revenue for songwriters.”
Subscribers to AMU’s individual plan and primary holders of family plans are entitled to one audiobook of any length per month, a perk that continues even after each billing cycle. For those whose appetite for audiobooks exceeds the one-per-month offer, additional titles can be acquired through Audible via monthly subscriptions or a la carte purchases.
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The additional perk comes without an increase in price — for the time being. Steve Boom, vp of audio, Twitch and games, said Amazon’s strategy is be “to add new things to the product” that add value and later “figure out what the right pricing strategy is in the long term.” In the U.S., AMU costs $9.99 for Prime members and $10.99 for non-Prime subscribers, both less than Spotify’s $11.99 monthly fee and, for non-Prime subscribers, equal to to Apple Music’s $10.99 price.
Spoken-word content has already proven a valuable complement to music. After AMU added podcasts in 2020, subscribers embraced having both music and spoken-word content in the same app, noted Boom. “The convenience of having both music and spoken word in the same app has proven really effective. It makes logical sense to bring audio books into it as well.”
Audiobooks will not be made available to Amazon Music Prime, the tier included with a basic Prime subscription, or Amazon Music Free, a free option with playlists, radio stations and podcasts.
The concept of “bundling” multiple services together has become a hot-button issue for songwriters and publishers. At the start of March, Spotify Premium subscriptions, including family and duo tiers, were quietly reclassified as bundled offerings, with both music and audiobooks included in the plans.
According to the stipulations of Phonorecords IV — the government-regulated guidelines that dictate the mechanical royalty rates for streaming from 2023-2027 — bundled services can qualify to pay out a lower royalty rate for publishing given that subscription dollars must be split between multiple services (in this case, books and songs). As a consequence, Billboard calculated that publishers and songwriters will earn an estimated $150 million less in U.S. mechanical royalties than previously expected in the 12 months following the change.
At the time, NMPA’s CEO/president David Israelite said he would “declare war” on Spotify — and he subsequently launched a multi-pronged effort to stop the streamer. This included sending Spotify a cease and desist for unlicensed lyrics, video and podcast content; filing a legislative proposal with both the U.S. House of Representatives and the Senate Judiciary Committees; and filing a Federal Trade Commission complaint. Around the same time, the Mechanical Licensing Collective (the MLC) sued Spotify for “improperly” classifying these tiers as bundles.
“We are optimistic about the new Amazon bundle,” Israelite told Billboard in a statement. “Amazon has engaged with the music publishing and songwriting industry in a respectful and productive way, unlike Spotify. We expect this new Amazon bundle will not decrease revenue for songwriters. Unlike Spotify, Amazon is looking at music creators as business partners and seeking to have a deal in place before the first round of royalty payments. This is in stark contrast to Spotify who is trying to pervert the compulsory license and slash what they pay songwriters.”
The NMPA and Amazon Music have not yet reached a final agreement.
Many in Nashville’s elite country music songwriting community were honored at the Country Music Hall of Fame on Thursday evening (Oct. 24), as the National Music Publishers’ Association (NMPA) held its 2024 Gold and Platinum Gala, honoring many of the songwriters behind several RIAA-certified singles within the 2023-2024 eligibility period.
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Prior to the beginning of the ceremony, guests and honorees mingled during a reception, noshing on hors d’oeuvres. NMPA president/CEO David Israelite ushered in the evening in the Country Music Hall of Fame’s sixth-floor reception space overlooking downtown Nashville, calling the certifications the “most definite measurement of songwriters’ success.”
The evening feted nearly 120 multi-platinum honoree songwriters from Nashville’s songwriting community, with over 150 gold, platinum and multi-platinum-certified writers in attendance. Ninety-one songs were honored that have earned double-platinum or higher certification for the eligibility period.
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Uniquely, the evening’s honored songs spanned decades, feting new certifications for Toby Keith’s 1990s signature hit “Should’ve Been a Cowboy,” while other honored songs, such as Shaboozey’s “A Bar song (Tipsy),” were released only months ago.
Israelite also recognized the essential advocacy work and support of the RIAA’s chair/CEO Mitch Glazier and Nashville Songwriters Association International (NSAI) executive director Bart Herbison in making the evening honoring songwriters possible.
Bailey Zimmerman brought his joyous energy to the stage, recalling a bit of his songwriting process, and how he merged the chorus from one song idea with the verse of another idea to form one of his breakthrough hits, his 4x platinum “Fall in Love.” “Show up every day and keep writing songs because you never know which will be the one,” Zimmerman said, before also performing “Rock and A Hard Place.”
“My first-ever platinum record, y’all!” singer-songwriter Hailey Whitters said earlier in the evening, before performing her RIAA platinum-certified song “Everything She Ain’t.”
Ashley Gorley
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Breland performed his Gold-certified “For What It’s Worth,” turning in one of the best vocals of the night. He followed with his new song “Same Work,” from his new album 2024 Project.
Throughout the evening, NMPA Exec. VP and general counsel Danielle Aguirre recognized those writers celebrating 2x platinum-certified songs, while NMPA senior vp, external affairs Charlotte Sellmyer revealed more multi-platinum songs.
Later in the evening, the late Country Music Hall of Famer Toby Keith’s longtime manager TK Kimbrell accepted on behalf of the late Keith, for Keith’s 3x platinum-honored “Should’ve Been a Cowboy” and the 2x platinum “How Do You Like Me Now?!,” while Keith’s longtime song collaborator Scotty Emerick accepted for songs including the 3x platinum “As Good As I Once Was,” and the 2x platinum “Beer For My Horses,” and “I Love This Bar.”
Also celebrated was late songwriter Kyle Jacobs, for his work in crafting the 5x multi-platinum song “Rumor.” Jacobs’s parents Reed and Sheri Jacobs accepted the honor on his behalf, and drew a standing ovation from the crowd of Nashville music publishers and songwriters, many of whom have collaborated with Jacobs over the years.
The male songwriter of the year accolade went to Ashley Gorley. Notably, the prolific Gorley beat singer-songwriter Zach Bryan to win the NMPA honor by a single song certification this year.
Israelite called Gorley a “primary crafter of today’s country sound and why it’s reached unprecedented crossover appeal.” Gorley briefly thanked his co-writers, as well as publishers at Sony Music Publishing, and his Tape Room Music colleagues, saying simply and earnestly, “Thank you for this.”
The female songwriter of the year honor was awarded to Jessi Alexander, for her work on songs including Luke Combs’s “5 Leaf Clover,” Little Big Town’s “You, Me and Whiskey” and Morgan Wallen’s “The Way I Talk.”
“I thought I’d work at Subway forever, but thank you for giving me my dream job, which is writing songs,” Alexander said, before thanking her husband, songwriter Jon Randall, as well as her publishers, including Warner Chappell Music Nashville’s president/CEO Ben Vaughn and vice president, A&R and digital Jessi Vaughn Stevenson.
The evening closed with Israelite introducing Jordan Davis, who performed his double platinum-certified “Next Thing You Know” and the 4x platinum-certified “Buy Dirt.” “I always say this song was written about the three most important things in my life: my faith in Jesus, my wife, my kids-my family-and my friends,” Davis said of “Buy Dirt.”
Addressing the songwriters, publishers and other industry members in the room, Davis added, “Thank you for what you do day in and day out. I’m grateful to be in Nashville, Tennessee and get to be a songwriter alongside all of y’all.”
See the full list of the honored songwriters and songs below:
Double-platinum songs:Chase McGill and Jaren Johnston for “5 Foot 9”Blake Pendergrass for “865”Danny Orton for “19 You + Me”Jerrell Jones and Mark Williams for “A Bar Song (Tipsy)”Brandon Kinney and Josh Thompson for “Ain’t Always the Cowboy”Carson Chamberlain and Wade Kirby for “All Over The Road”Hillary Lindsey and Jordan Davis for “Almost Maybes”Chris DeStefano for “Aw Naw”Chris Lane and Jacob Durrett for “Big, Big Plans”Drew Parker for “Doin’ This”Luke Laird for “Down To The Honkytonk”Ben Burgess and Mark Holman for “Flower Shops”Ben Johnson for “Give Heaven Some Hell”Barry Dean for “Heartache Medication”Jonathan Singleton for “Houston, We Got A Problem”Brett Jones and Rob Hatch for If “Heaven Wasn’t So Far Away”Chris DeStefano and Josh Hoge for “Losing Sleep”Billy Montana and Brian Davis for “Memory I Don’t Mess With”Daniel Breland, Devon Barton, Edrick Miles, Kalvin Austin, Tatiana Zeigler and Troy Taylor for “My Truck”Chase McGill, Greylan James and Jordan Davis for “Next Thing You Know”Chris DeStefano for “Nothin’ Like You”Brett James and Tony Lane for “On My Way to You”Jared Keim and Ryan Beaver for “Pretty Little Poison”Alexander Palmer, Austin Shawn, Bailey Zimmerman, Frank Romano and Marty James for “Religiously”Josh Kerr for “She Likes It”Sergio Sanchez for “Spin You Around”Ben Williams, David Fanning and Paul Jenkins for “Tennessee Orange”Gary Hannan for “Tequila Makes Her Clothes Fall Off”Andy Albert, Dustin Lynch and Will Weatherly for “Thinking ‘Bout You”Jordan Schmidt and Renee Blair for “wait in the truck”Jordan Davis and Ryan Hurd for “What My World Spins Around”Lindsay Rimes for “Whiskey on You”Paul Jenkins for “Who I Am With You”Tofer Brown for “Wine, Beer, Whiskey”
3x platinum songs:Johnny Bulford, Jon Stone and Phil Barton for ‘A Woman Like You”Jordan Reynolds and Nicolle Galyon for “All To Myself”Wayne Kirkpatrick for “Boondocks”Dave Barnes and Julian Bunetta for “Craving You”Eric Paslay for “Even If It Breaks Your Heart”Chris DeStefano for “From the Ground Up”Brock Berryhill, Shy Carter, Taylor Phillips and Will Weatherly for “Good As You”Brock Berryhill, Matt McGinn and Taylor Phillips for “Homesick”Chase McGill and Will Weatherly for “Lose It”Billy Montana and Tofer Brown for “Night Shift”Hillary Lindsey and Jake Mitchell for “One Beer”Brad Warren, Brett Warren and Jim Beavers for “Red Solo Cup”Mark Sanders and Tim Nichols for “She Had Me At Heads Carolina”Jacob Durrett for “Somebody’s Problem”Christian Stalnecker and Josh Hoge for “Thank God”Dan Isbell, Reid Isbell and Jamie Davis for “The Kind of Love We Make”Ben Hayslip, Chase McGill and Jessi Alexander for “The Way I Talk”Charlie Handsome and Taylor Phillips for “Thinkin’ Bout Me”Anthony Smith for “Tomorrow”Brian White, Rodney Atkins and Steve Dean for “Watching You”
4x platinum songs:Jacob Davis, Jordan Davis and Joshua Jenkins for “Buy Dirt”Austin Shawn, Bailey Zimmerman and Gavin Lucas for “Fall In Love”Rachel Thibodeau for “Good Directions”Bart Butler for “Heartache On The Dancefloor”Ben Hayslip and Rhett Akins for “Huntin’, Fishin’, and Lovin’ Every Day”Corey Crowder and Josh Hoge for “I’m Comin’ Over”Jason Matthews and Marty Dodson and for “Must Be Doin’ Somethin’ Right”Ben Johnson for “One Of Them Girls”Nicolle Galyon for “Thought You Should Know”Charlie Handsome for “You Proof”
5x platinum songs:Ben Glover, Billy Montana and John Ozier for “Hard to Love”Sammy Mitchell and Steven Battey for “One Number Away”Heath Warren and Jet Harvey for “Rock and a Hard Place”Kyle Jacobs for “Rumor”Brad Clawson for “Up Down”
6x platinum songs:Jonathan Singleton for “Beer Never Broke My Heart”Jamie Moore for “Chasin’ You”Joshua Jenkins and Shane Stevens for “Fancy Like”Charlie Handsome for “More Than My Hometown”
7x platinum songs:Charlie Handsome and Ryan Hurd for “Heartless”Charlie Handsome for “Last Night”Channing Wilson and Rob Snyder for “She Got The Best of Me”Jordan Reynolds and Laura Veltz for “Speechless”
8x platinum song:Charlie Handsome and Josh Thompson for “Wasted On You”
9x platinum songs:Taylor Phillips and Thomas Archer for “Hurricane”Jordan Schmidt and Matthew McGinn for “What Ifs”Ben Burgess and Kevin Kadish for “Whiskey Glasses”
10x platinum songs:Lindsay Rimes, Matthew McGinn and Shy Carter for “Platinum Heaven”Trent Tomlinson and Tyler Reeve for “In Case You Didn’t Know”
12x platinum Song:Charles Kelley for “Need You Now”
During the National Music Publishers’ Association (NMPA) annual meeting on Wednesday (June 12), the trade organization said it had calculated total U.S. publishing revenue at $6.2 billion in 2023, up 10.74% from the previous year.
The event, held at Alice Tully Hall at Lincoln Center in New York, is thought of as a state of the union for the U.S. music publishing business. During the presentation, it’s also common for NMPA president/CEO David Israelite to announce major actions it’s taking against tech companies on behalf of publishers. This year, he targeted Spotify, sending an official complaint to the Federal Trade Commission (FTC) as well as letters to the attorneys general of nine states and a list of consumer groups — urging them to stop Spotify’s efforts to bundle music and audiobooks into its premium tiers. It’s the first time the NMPA has involved the FTC in its fight with a tech company.
For publishers and songwriters, Spotify’s decision to include audiobooks in its premium tiers and categorize those tiers as “bundles” — a type of plan that qualifies for a discounted rate on U.S. mechanical royalties given that multiple products are offered under one price tag — means a lower royalty rate for music given that both music and audiobooks must now be paid out from the same royalty pool. In May, the NMPA launched its war with Spotify by sending a cease and desist letter to the streamer for allegedly hosting lyrics, music videos and podcast content that contain their members’ copyrighted musical works without proper licenses.
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In Wednesday’s FTC complaint, the NMPA says Spotify “has deceived consumers by converting millions of its subscribers without their consent from music-only subscriptions into ‘bundled’ audiobook-and-music subscriptions, publicly announcing increased prices for those subscriptions, failing to offer an option for subscribers to revert to a music-only subscription, and thwarting attempts to cancel through dark patterns and confusing website interfaces.” (For more on this, check out Billboard‘s full coverage of the FTC complaint here.)
Aside from Israelite’s big announcement, the event also honored top songwriters for their contributions to the music business — including an opening tribute to songwriter and outgoing NMPA board member Ross Golan. The NMPA also issued awards to Lana Del Rey, this year’s Songwriter Icon recipient, and Savan Kotecha, winner of the Non-Performing Songwriter Icon award. Elsewhere, “Can’t Help Falling in Love” was honored with NMPA’s Iconic Song award, featuring a performance of the song by Ingrid Michaelson.
The event additionally featured fireside chats with Robert Kyncl, CEO of Warner Music Group, and Shira Perlmutter, register of copyrights and director of the U.S. Copyright Office.
NMPA’s annual meeting comes amidst a busy year in the music publishing business. At the start of 2024, the MLC, which collects and distributes U.S. mechanicals, began its first-ever redesignation process — a routine five-year review of its operations to determine if any changes need to be made to the organization.
The same month, UMG pulled its music catalog from TikTok, including its publishing interests, alleging that the short-form app did not pay the “fair value” of music while also raising concerns regarding AI and artist safety. The NMPA showed its support for UMG regarding the move and even joined the music giant by letting the NMPA’s model license with TikTok, used by a number of indie publishers, lapse at the end of April. (UMG and TikTok eventually made a deal.)
Lana Del Rey will receive this year’s NMPA Songwriter Icon award, the National Music Publishers’ Association (NMPA) announced today. The award will be presented at the organization’s annual meeting at Alice Tully Hall at Lincoln Center in New York City on June 12.
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Del Rey, 38, has received 11 Grammy nominations (but, surprisingly, no wins yet). Her nods include three in songwriting categories – “Norman Fu—ing Rockwell” and “A&W,” both for song of the year, and “Young and Beautiful” (from Baz Luhrmann’s The Great Gatsby) for best song written for visual media. She was also nominated for a Golden Globe for co-writing “Big Eyes” from the Tim Burton of the same name.
“Lana Del Rey defines being iconic,” NMPA president and CEO David Israelite said in a statement. “Her influence is felt across all genres and has inspired the biggest artists in the business. Her songwriting is deeply personal, and she continues to innovate – bringing fans thought provoking lyrics and indelible style.”
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Savan Kotecha will receive the NMPA Non-Performing Songwriter Icon award. Kotecha has received Grammy, Golden Globe and Oscar nods in songwriting categories. He received a Grammy nod for best song written for visual media and a Golden Globe nod for best original song for “Love Me Like You Do” and an Oscar nod for best original song for”Husavik” from Eurovision Song Contest: The Story of Fire Saga.
“Savan Kotecha is virtually unmatched in his impact on pop music,” Israelite said in a statement. “He has helped craft the sounds for so many of the biggest hits of the past decade. We are thrilled to honor his continued success.”
The timeless ballad “Can’t Help Falling in Love,” co-written by Luigi Creatore, Hugo Peretti and George David Weiss, will be honored as an NMPA Iconic Song. Elvis Presley’s original hit version of the song, recorded for his 1961 film Blue Hawaii, reached No. 2 on the Billboard Hot 100 in 1962. UB40’s reggae-tinged cover version, recorded for the film Sliver, spent seven weeks at No. 1 in 1993.
Congressman Darrell Issa (R-CA) will receive the NMPA President’s award for his work to support creators.
Additionally, Warner Music Group CEO Robert Kyncl will sit down for a keynote conversation. Register of Copyrights Shira Perlmutter will discuss the current challenges of protecting intellectual property.
“War!” a singer once shouted. “What is it good for?” Well, that depends. In the music business, what can seem like grand ideological conflicts are usually just messy public negotiations over money. That doesn’t mean they’re not brutal, though. And sometimes the amounts at stake turn out to be very much worth fighting over.
The latest industry imbroglio is the National Music Publishers Association’s conflict with Spotify — call it the Battle of the Bundle — which could be worth about $150 million next year. On March 1, Spotify added access to audiobooks to its standard subscription to create a product that it says qualifies as a bundle under the terms of its 2022 legal settlement of the Phonorecords IV rate-setting procedure with the NMPA. Then, as the settlement says it can do, it allocates part of the subscription cost to the audiobook piece of the bundle in order to qualify for a lower payment to publishers.
Whether or not Spotify has a legitimate bundle, it sure has chutzpah — converting all of its U.S. subscribers to bundle customers is a bold move. Now it also has a war on its hands. Already, the NMPA has sent the company a cease and desist for alleged unlicensed content and the allied Mechanical Licensing Collective (MLC) filed a lawsuit about the bundling.
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This is only the response to the attack, though. By trying to cut payments to publishers, Spotify essentially attacked the NMPA, with which the streaming services settled, as well as its president and CEO David Israelite, who actually seems to enjoy this kind of combat. Just to be clear, I don’t think that Israelite literally loves fighting, but I do think he gets a certain satisfaction out of being good at it — he was a champion college debater and he’s a talented amateur poker player. He’s the kind of opponent who thinks strategically, sees several moves ahead and fights on a number of fronts at once.
The obvious fight will be the lawsuit filed by the MLC, which is likely to be long and expensive — think of it as a long slog of a ground war. The expense of that will be borne by the streaming services, though, since they fund the MLC’s operations under the provisions of the Music Modernization Act. But Israelite will attack on other fronts as well. The cease-and-desist letter marks the beginning of probing attacks, each one small. Spotify now licenses the works it uses but are there a few hundred uses of some works that might have slipped through the cracks? At a maximum of $150,000 per work in statutory damages for willful infringement, those oversights add up fast. Just as important, a slowdown in licensing for other uses, including video, could keep Spotify from moving forward with some of its plans to compete with Apple and Amazon.
Israelite will also move forward with what one might call sanctions, by trying to organize different parts of the music business against Spotify, much as Universal Music Group did with TikTok. Most years, the June NMPA Annual Meeting includes the music business version of Two Minutes Hate for an online company that’s not paying or underpaying rightsholders. That’s in less than a month. It’s hard to know how successful this will be, but it seems reasonable to assume that Spotify is going to have a much harder time booking acts to play its party during next year’s Grammy Week.
Israelite has also said he plans to take the fight to Capitol Hill with a legislative proposal to give publishers and songwriters more negotiating power. (If war is just the continuation of policy by other means, as Carl von Clausewitz has it, can’t the reverse also be true?) The odds of passing this legislation soon don’t seem all that high — right now the odds of passing any legislation soon don’t seem all that high — and if publishers and songwriters had the power to make it happen, they would have been trying already. But it starts a conversation that the NMPA wants to start, and it opens a front where the NMPA can fight at an advantage, partly because Israelite, a former Hill staffer, would fight on his home turf. Could the NMPA could get a hearing on the topic of songwriter pay that would embarrass Spotify? The company could argue that it needs margin relief, and it does, but how would that look on TV?
If this sounds like an incredibly elaborate and expensive way to figure out the definition of a bundle, you’re missing the point. Because it is, but also because no one cares. The point, for the NMPA, is to force Spotify to concede, through some combination of litigation, legislation and PR. Strong spotlights create a harsh glare. From Spotify’s perspective, looking for copyright infringement that fell through the cracks might seem like an aggressively-literal reading of the law. But isn’t an automatic bundle aggravatingly literal in its own right?
There’s also a theory that Israelite needs to get music publishers out of a situation he got them into, since he backed the 2022 settlement that allowed for bundles, but this is unfair. Under the decision in the rate-setting case before this, Phonorecords III, bundles were allowed and could be accounted for by subtracting the value of one from the total price, then using the remainder to calculate royalties. Under the Phonorecords IV settlement, bundles must be accounted for proportionally, which is far from ideal but a bit better. Obviously, Israelite and the NMPA thought they could get a better deal by settling the case than fighting it out in court, at great expense, and the NMPA board approved it. Arguably, they’d have ended up fighting either way.
That brings up another question: Phonorecords IV only covers the period through the end of 2027. Before that, both sides will go back to rate court, each more inclined to fight and less apt to settle. Whatever happens, the publishers will lose predictability and Spotify will look bad, especially compared to its rival streaming services. There could be a long, grinding Cold War that really will be good for nothing.
The National Music Publishers’ Association (NMPA) has sent a letter to Judiciary Committee leadership in both the U.S. House of Representatives and Senate, asking for the overhaul of the statutory license in section 115 of the Copyright Act, which “prevents private negotiations in a free market” for mechanical royalty rates for songwriters and music publishers in the U.S.
On May 20, David Israelite, the organization’s president and CEO, teased this announcement in a guest column for Billboard, saying: “soon we will unveil a legislative proposal to permanently fix the power imbalance songwriters face by being subject to a compulsory license for their songs.”
In his new letter, NMPA’s Israelite writes that doing away with the 100-year-old system of government-regulated price setting for songwriter and publisher royalties (specifically, mechanical royalties) and allowing rate negotiations to occur in a free market would prevent songwriters and publishers from being taken advantage of by “Big Tech:” “Those who do operate in a free market, such as record labels, have negotiated protections against bad faith tactics. However, music publishers and songwriters have no such leverage under the [Copyright Royalty Board] to do so.”
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For years, music publishers and songwriters have lamented that they do not get to negotiate for their U.S. mechanical royalty rate privately because of wording in section 115 of the Copyright Act, which places “non dramatic musical works,” like songs, under a compulsory license, dating back to 1909. The rate for that license is determined by a set of Copyright Royalty Board judges, who weigh the interests of the music business against that of tech companies like Spotify, Apple Music, Amazon Music and more to determine what they feel is a fair price for music.
Record labels, which work with “sound recording” copyrights, not “musical works,” are able to freely negotiate their rates, as are music publishers and songwriters outside the U.S. Because of the discrepancy between how U.S. music publishers and songwriters are treated compared to others, publishers feel that they are held back from getting the best rates possible.
The letter arrives just a week after music publishers, the NMPA, and the Mechanical Licensing Collective (The MLC) — which collects and distributes mechanical royalties for U.S. publishers and songwriters — waged a war against Spotify for paying a lower U.S. mechanical royalty rate for premium, duo and family plans, starting in March 2024. Spotify believes that the addition of audiobooks to premium, duo and family plans qualifies these tiers as bundles, a type of subscription that pays a lower royalty rate.
For days after this information was first reported, various music organizations made statements against Spotify, often calling its reclassification “cynical” and a “loophole” to pay songwriters less and takes advantage of the settlement made between music publishers, songwriters and streamers to agree on a rate structure for 2023-2027 (known as “Phonorecords IV”), which was approved by the Copyright Royalty Board judges.
In the NMPA’s letter — addressed to Sen. Richard Durbin (D-Ill.), Sen. Lindsey Graham (R-SC), Rep. Jim Jordan (R-OH), and Rep. Jerrold Nadler (D-NY) — Israelite calls Spotify’s move a “manipulat[ion] [of] the compulsory licensing rules” and the latest in what he feels is the “continued abuse of the statutory system by digital services… [which] has made it clear that additional action by Congress is needed.”
On May 15, the NMPA sent a cease and desist letter to the streamer for hosting lyrics, music videos, and podcast content that contain their copyrighted musical works without a proper license. The next day, on May 16, The MLC joined in, filing a lawsuit against Spotify for “improperly” reclassifying its premium, duo and family plans and trying to get a discount, which would result in what Billboard estimates is a $150 million annualized reduction in U.S. mechanical royalties, compared to what they would have paid if these tiers never changed over.
In his new letter, NMPA’s Israelite proposes a solution for abolishing the current system, saying: “Congress should allow rightsholders the choice to license through the MLC using the statutorily set royalty rates or to withdraw from the MLC and operate in a free market if they meet certain conditions.”
He continues, “if copyright owners chose to withdraw their copyrights from the blanket license, currently administered by the MLC, they would be required to do the following:
Require all rightsholders who exercise this option to provide 6 months’ notice to the Register of Copyrights and the MLC;
Require that the withdrawing rightsholders ensure their musical work copyrights and ownership interests are registered in the MLC’s public database;
Require the MLC to flag those rightsholders and their catalogues as withdrawn from the MLC blanket license and subject to voluntary license negotiations; and
Require copyright holders to maintain with the MLC database current, up-to-date contact information, which would be used to contact for licensing.”
Read the full letter below:
Dear Chair Durbin, Ranking Member Graham, Chairman Jordan, and Ranking Member Nadler:
The Music Modernization Act (MMA) has offered not only songwriters and music publishers, but also digital service providers, unprecedented benefits. However, the bill has amplified the need for corrections to the century-old compulsory license governing their work.
Large, foreign-owned companies, like Spotify, should not enjoy unfair advantages over American songwriters because of outdated federal policy. By making one simple change, Congress can undo a more than 100-year-old mistake in the compulsory license and ensure songwriters and music creators continue to benefit from their creative efforts.
How did we get here? Almost six years ago, members of the House and Senate Judiciary Committees came together to pass the MMA, a landmark piece of copyright legislation for the age of digital music streaming. The MMA took important steps forward in improving the compulsory license imposed on songwriters and music publishers by creating the Mechanical Licensing Collective (MLC) to administer a blanket license under Section 115 of the Copyright Act, which is taken by digital music services.
The MLC increased transparency through a public database, furthered licensing efficiency through a central administrator, and improved the process for distributing musical work royalties. However, the benefits did not extend to, or remedy, the ongoing issues faced by rightsholders subject to the government rate-setting process.
The continued abuse of the statutory system by digital services, most recently Spotify, has made clear that additional action by Congress is needed. The royalty rates paid to musical work copyright owners for uses of those works under the Section 115 blanket license are set in a proceeding before the Copyright Royalty Board (CRB), within the Library of Congress, once every five years. In these proceedings, music publishers and songwriters must face off against some of the biggest tech companies in the world: Spotify, Apple, Amazon, Google, among others to establish rates for the use of musical works.
Because the law prevents private negotiations in a free market, publishers and songwriters have seen ongoing abuse of the statutory system and CRB rate-setting process with little ability for recourse. Most recently, Spotify has found a new way to game the statutory rate system to underpay rightsholders by hundreds of millions in royalties.
In March, Spotify began manipulating the compulsory licensing rules and reclassified its premium subscription music service, along with almost 50 million subscribers, into what it is calling a “bundle.” The benefit to taking this action is, under the compulsory royalty rates, bundles attribute less revenue – and therefore pay less in royalties – to the music than a premium subscription music service. Spotify has taken a part of its music service that was previously offered to consumers for free, audiobooks, and it is now calling audiobooks a bundle with its music service to substantially reduce the musical work royalties owed.
Those who do operate in a free market, such as record labels, have negotiated protections against these bad faith tactics. However, music publishers and songwriters have no such leverage under the CRB to do so.
Fortunately, there are solutions Congress can enact that would preserve the benefits of the MMA and the MLC while providing songwriters and publishers a better chance to compete on a level playing field with Big Tech firms like Spotify. Rather than picking who wins and who loses, Congress should allow rightsholders the choice to license through the MLC using the statutorily set royalty rates or to withdraw from the MLC and operate in a free market if they meet certain conditions.
If copyright owners chose to withdraw their copyrights from the blanket license, currently administered by the MLC, they would be required to do the following:
Require all rightsholders who exercise this option to provide 6 months’ notice to the Register of Copyrights and the MLC;
Require that the withdrawing rightsholders ensure their musical work copyrights and ownership interests are registered in the MLC’s public database;
Require the MLC to flag those rightsholders and their catalogues as withdrawn from the MLC blanket license and subject to voluntary license negotiations; and
Require copyright holders to maintain with the MLC database current, up-to-date contact information, which would be used to contact for licensing.
This would give rightsholders the option to stay within the current compulsory system or to operate within a free market. It would also restore basic principles of fairness to the market by requiring streaming platforms to deal with music makers as partners. Finally, it would provide a needed point of leverage for songwriters and music publishers to negotiate with streamers, like Spotify, who can otherwise use their power to bend government regulations to their advantage. All of this could be accomplished by building on the successful infrastructure created by the MMA and the MLC.”
Spotify has once again shocked the songwriting community by attempting to use a legal loophole to find a new way to pay them less.
Music creators had enjoyed a relative period of peace with Spotify since songwriters and music publishers struck a deal with digital services in 2022 to raise royalty rates over the next five years. Unfortunately, the streaming giant is now perverting that agreement by using audiobooks to redefine and reduce how much they pay songwriters – the tune of hundreds of millions of dollars. By unilaterally adding audiobooks to their premium music standalone service, they are now classifying that music service as a ‘bundle’ which means they can attempt to pay royalties under a different definition. In a single year this could cost songwriters an estimated $150 million.
Whether or not they can get away with this is still in question.
Record labels, who are in a free market, have immediate recourse against such underhanded tactics. They are not under a compulsory license like songwriters, and they have the freedom to negotiate directly with streaming services like Spotify. Crucially, this means if they don’t like the way their royalties are affected by Spotify’s bundling strategy, they can say no.
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Unfortunately, songwriters and music publishers cannot. They must go to court every five years and are at the mercy of three judges to interpret Spotify’s routing of the rules.
Spotify first aggressively came for songwriters in 2018. We had achieved a 44% raise in the headline rate for mechanical streaming royalties at the Copyright Royalty Board (CRB) – raising rates from 10.5% to 15.1% of revenue. In an unprecedented move, Spotify launched an appeal of that decision, sending us into a half-decade legal odyssey which ultimately resulted in the upholding of our headline rate increase as well as a few new changes.
Fast forward to 2022. Having lost their appeal in regard to the headline rate, the streaming services came to the table to negotiate the next five-year period.
To avoid repeating another era of uncertainty, and to ensure rates and terms improved, we agreed to a deal with Spotify, Amazon, Apple, Google, and Pandora to cover 2023-2027 which included a phased-in headline rate increase. Critically, it also included strengthening bundle definitions by ensuring that services were no longer able to attribute all parts of revenue to other non-music offerings in the bundle. However, the court prevented us from doing away with bundle definitions altogether because when a service pays under the bundle definition, they pay at a discount since music is only part of the offering.
Only recently, when reporting of royalties by Spotify sharply decreased in the middle of a CRB rate period, were we alerted to the fact that Spotify was reinterpreting the new bundle rules to manipulate their payments. However, calling Spotify’s premium service a bundle is dishonest.
After raising prices last year, there was great hope that Spotify would better align pricing with market value and songwriters would see the benefits resulting from the deal we agreed to in 2022 which ensures that when prices go up, so do their royalties.
Only in Spotify’s world would a price hike for users mean a lower royalty rate for songwriters.
As we look to the next CRB trial, where we will again face the largest tech companies in the world, we had hoped to approach it as business partners, bolstered by several years of collaboration. This development has shattered that potential as Spotify has returned to attacking the very songwriters who make its business possible – and worse, they’re doing it through a dishonest work-around.
Bundles were conceived to apply when two standalone products were combined to incentivize new users and grow the paying consumer base. What Spotify has done is act as if audiobooks are a new, separate service, when they are in fact the exact same premium streaming option to which millions of users are already subscribed.
In fact, in a bombshell last week, it was found that if you can even find where to sign up for the audiobook-only option, the first question Spotify asks you is who your favorite performing artists are – exactly like onboarding a music-only subscriber. It then offers you all of the music on its platform on-demand.
We will not stand for their misinterpretation of bundles as precisely defined in our settlement. If allowed to abuse the statutory formula in this way, it will pave the way for other services to do the same.
That’s why several serious actions are in process. Last week, the Mechanical Licensing Collective (MLC) sued Spotify for improperly reporting its usage – a.k.a. underpaying songwriters by labeling their services as a bundle.
As the MLC states in its complaint, “Spotify informs potential Audiobook Access subscribers that, unlike Premium subscribers, they will not have access to unlimited, ad-free, on-demand music. But in rolling out its Audiobooks Access plan, Spotify neglected to create a different product.”
Separately, NMPA also sent a demand letter to the streaming giant for its unlicensed use of musical works in its lyrics, videos, and podcasts. We also specifically warned Spotify about its rumored “remix” feature which would allow subscribers to “speed up, mash up, and otherwise edit” songs to create derivative works.
In addition to these legal challenges, soon we will unveil a legislative proposal to permanently fix the power imbalance songwriters face by being subject to a compulsory license for their songs.
Spotify’s cynical, and potentially unlawful, move should make all songwriters and artists question their relationship with the service. The strategy to rebrand music as a “bundle” further devalues their art and amounts to a complete betrayal.
David Israelite is the president and CEO of the National Music Publishers’ Association (NMPA). Founded in 1917, NMPA is the trade association representing all American music publishers and their songwriting partners.
In March, Spotify began paying music publishers and songwriters a discounted royalty rate for streams on its premium tiers — and the music business isn’t accepting the change without a fight. Spotify says that by adding audiobooks to its premium offerings, these subscriptions have been reclassified as “bundles,” a type of plan that qualifies for […]
The Mechanical Licensing Collective (the MLC) has filed a lawsuit against Spotify, calling the way the streamer reclassified its premium, duo and family plans as “bundles” and started paying a discounted royalty rate to publishers and songwriters “improper.”
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“The financial consequences… are enormous for songwriters and music publishers,” the MLC writes in the complaint.
News of the lawsuit arrives just a week after Billboard published its estimate that publishers and songwriters will earn about $150 million less in U.S. mechanicals in the next year, compared to what they would have been owed had the services not been bundled.
The root of the conflict started late last year when Spotify added 15 hours of free audiobook listening to Spotify premium, duo and family plans in the United States and other markets. At the time, this was a free extra for subscribers, and Spotify continued to pay the original full mechanical royalty rate for musical works in the United States.
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Starting in March, however, Spotify quietly launched an audiobook-only plan, then started to reclassify its premium, duo and family plans as bundles because audiobooks were included. According to Phonorecords IV, the agreement that dictates U.S. mechanical royalty rates for 2023-2027, bundles of multiple products are an inherently different type of subscription and thus use a different, lower royalty rate, given that multiple offerings must be paid for from the same subscription price.
In the lawsuit filed by the MLC, which processes and distributes mechanical royalties to publishers and songwriters in the United States, the organization argues “premium is exactly the same service” as it was previously. “Prior to March 1, Spotify paid mechanical royalties on the entirety of Premium revenues, subject to certain specific reductions identified in Section 115, despite the fact that Premium subscribers also had access to the same number of hours of audiobooks as Audiobooks Access subscribers now have,” the lawsuit reads.
“On March 1, 2024, without advance notice to the MLC, Spotify unilaterally and unlawfully decided to reduce the Service Provider Revenue reported to the MLC for Premium by almost 50 percent,” reads the complaint. “[This was done] by improperly characterizing the service as a different type of subscription offering and underpaying royalties, even though there has been no change to the premium plan and no corresponding reduction to the revenues that Spotify generates from its tens of millions of Premium subscribers.”
Spotify provided a statement to Billboard in response to the lawsuit, saying: “The lawsuit concerns terms that publishers and streaming services agreed to and celebrated years ago under the Phono IV agreement. Bundles were a critical component of that settlement, and multiple DSPs include bundles as part of their mix of subscription offerings. Spotify paid a record amount to publishers and societies in 2023 and is on track to pay out an even larger amount in 2024. We look forward to a swift resolution of this matter.”
Reports of Spotify’s change to its royalty rate structure for premium, duo and family plans first arrived in April. Immediately, the National Music Publishers’ Association (NMPA) began speaking out against Spotify’s reclassification, calling it an “end to our period of relative peace” and “potentially unlawful.”
On Wednesday (May 15), the NMPA sent Spotify a cease and desist letter regarding a separate issue: allegedly unlicensed lyrics and video. In the letter, NMPA general counsel/executive vp Danielle Aguirre also mentioned there might be some publishing content that “will soon become unlicensed” by its members. Spotify fired back at the letter in a statement, which read: “This letter is a press stunt filled with false and misleading claims.”
In its lawsuit filed Thursday, the MLC claims that to qualify for the bundle subscription rate, “an offering must include at least two distinct products or services. Premium does not,” adding, “Premium already consisted of unlimited music and access to other audio products including up to 15 hours of audiobook listening” as well as other offerings like podcasts.
The MLC further argues that the audiobook-only plan Spotify launched in March is not a different product, saying that it offers more than just audiobooks. “New Audiobooks Access subscribers are being granted access to 15 hours of audiobooks listening and the same access to unlimited, ad-free, on-demand music that Premium subscribers are provided. The only difference is that subscribers to Audiobooks Access are paying $9.99 per month, rather than $10.99, to receive the same product,” reads the complaint.
The MLC also notes that the “audiobook access subscription page does not appear to be directly accessible from Spotify’s website” — making the point that the offering is difficult to find. As a consequence, the MLC says it believes “there is little doubt that the number of subscribers who will sign up for Audiobooks Access is likely to be a fraction of the Premium subscribers.”
A few months ago, the MLC also sued Pandora, another streaming service it collects mechanical royalties from in the United States, for what it says is a failure to properly pay streaming royalties. That lawsuit is ongoing.
The MLC and the Digital Licensee Coordinator (DLC) — the organization intended to represent the majority interests of digital music providers affected by the blanket license set up by the Music Modernization Act (MMA) — are also currently in the process of their first five-year check-up (called a “re-designation” process) to ensure both are effectively fulfilling their duties. This routine, five-year check, conducted by the U.S. Copyright Office, allows the two organizations to self-report on their progress and gives key stakeholders — including the Digital Media Organization (DiMA) — the opportunity to speak to the strengths and weaknesses of the organizations.
The MLC’s operational costs are paid for by DiMA members, including Spotify, Pandora, Apple Music, Amazon Music and more, as set forth by the Music Modernization Act (MMA). In a blog post in March, DiMA’s CEO/president, Graham Davies, pointed out that the MLC is “suing one of the licensees [Pandora] that pays its costs.” The NMPA replied to this post by defending the MLC, saying that streamers “do not want what is in the best interests of music publishers or songwriters,” calling DiMA’s “new…strategy…an effort by the world’s largest digital companies to leverage their power to pay less.”
The NMPA’s president/CEO David Israelite provided a statement of support for the MLC lawsuit, saying, “we applaud the MLC for standing up for songwriters and not letting Spotify get away with its latest trick to underpay creators. The MLC is tasked with challenging services who falsely report royalties, and we commend their swift action. The lawsuit sends a clear message that platforms cannot improperly manipulate usage — in this case unilaterally redefining services as a bundle — in order to devalue music. We strongly support the MLC and will continue to pursue justice.”
The National Music Publishers Association (NMPA) has sent a cease and desist letter to Spotify for allegedly hosting lyrics, music videos and podcast content that contain their members’ copyrighted musical works without proper licenses. The organization, which represents music publishers in the U.S., says that it “demands” that these alleged unlicensed works “be removed from the platform or Spotify will face copyright liability for continued use of these works.”
The letter comes a week after Billboard released an estimate, claiming that Spotify will pay about $150 million less in U.S. mechanical royalties to music publishers and songwriters in the next year than what publishers and songwriters were previously expecting. This is because Spotify added audiobooks into its premium, family and duo plans, and the company claims that the move now qualifies them as a bundle, which pays a discounted royalty rate from normal standalone subscriptions, given Spotify now has to pay for books and music from the same subscription price.
The cease and desist letter, obtained by Billboard, covers a separate issue to last week’s announcement, but the timing suggests the NMPA is hoping to push back against Spotify’s practices on several fronts. The letter continues: “Spotify appears to be engaged in direct infringement by hosting unlicensed musical works in its lyrics, videos and podcasts and by distributing unauthorized reproductions, synchronizations, displays and derivative sues of these musical works to its users. Making matters worse, Spotify profits from such infringement.”
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Written by NMPA’s executive vp and general counsel Danielle Aguirre, the letter did not cite any specific unlicensed works or say how many instances there are of unlicensed works on Spotify and warned about both unlicensed works as well as works that “will soon become unlicensed” by its members. When asked for a list or a ballpark number of the unlicensed works, NMPA declined to comment. If the NMPA ever gets to the point of filing a lawsuit against Spotify for these alleged offenses, however, the organization would then provide more detail.
Many music publishers currently have licenses in place with Spotify for their lyrics and video content. Unlike the government-regulated process of setting U.S. mechanical royalty rates, lyric and video licenses are direct deals between the publisher and the streaming service, and each negotiation is unique, but for lyrics specifically, some publishers will license through third party aggregators like Lyric Find. These deals are not considered to be major money makers for publishers or streamers, and although their duration can vary, the licenses typically run for 1-2 years, according to a source close to the matter.
The NMPA also cites a recent Wall Street Journal article that claimed Spotify is working on tools that would allow subscribers to “speed up, mash up and otherwise edit songs from their favorite artists” in its letter to Spotify, warning the streaming platform that if “any such feature” is released by Spotify “without the proper licenses in place from our members” it “may constitute additional direct infringement.”
Spotify and the NMPA have a history of not getting along, but since late 2022, it appeared the two were on relatively good terms. After a contentious five years of back-and-forth over how to set the U.S. mechanical royalty rate for streaming for 2018-2022, the NMPA, Nashville Songwriters Association International (NSAI) and streaming services, like Spotify, came together to collectively settle the next rate period together (2023-2027), hoping to avoid another lengthy and costly fight. The result was something David Israelite, president and CEO of the NMPA, touted at the time as the “highest streaming rates in the history of digital streaming,” due to a raise in the headline rate.
Part of the compromise for that settlement, however, included an update to how bundles were treated, which was considered a potential benefit to streaming services. As the Association of Independent Music Publishers (AIMP) put it in their statement against Spotify’s bundling practices, music publishers believe Spotify used a “loophole” to “circumvent the [Copyright Royalty Board] settlement.” Israelite went further, calling the bundle reclassification a “potentially unlawful move” when it was first announced, even though Spotify believes it rightfully qualifies. Recently, the NMPA admitted a lawsuit against Spotify for bundling was “likely.”
Read the full letter below:
Dear Mr. Kaefer [vp and global head, music and audiobook business] and Ms. Konstan [general counsel of Spotify]:
I write on behalf of the National Music Publishers’ Association (“NMPA”) regarding copyright infringement of our members’ musical works on the Spotify platform. As the voice of our members, NMPA protects, promotes, and advances the interests of music creators and enforces the rights of publishers, and their songwriter partners, who own and/or control musical work copyrights.
Music is essential to Spotify’s service; it is the reason subscribers utilize the Spotify platform every day. Spotify’s primary use of musical works via interactive streams and downloads is subject to the antiquated compulsory license under 17 U.S.C. § 115 and consent decree-governed public performance licenses.
Regardless of the mechanical and public performance licenses Spotify may have, however, the use of lyrics and music in videos and podcasts on its platform requires rights that must be negotiated directly with rightsholders in a free market.
It has come to our attention that Spotify displays lyrics and reproduces and distributes music videos and podcasts using musical works without the consent of or compensation to the respective publishers and/or administrators (our members) who control the copyrights in the musical compositions. As such, these uses of musical works on the Spotify platform are not licensed or will soon become unlicensed.
U.S. copyright law generally grants copyright owners the exclusive right to, among other things, reproduce, distribute, display, perform publicly, and create derivative works from their copyrighted works under 17 U.S.C. § 106. Violation of these exclusive rights constitutes copyright infringement under 17 U.S.C. § 501.
Spotify thus appears to be engaged in direct infringement by hosting unlicensed musical works in its lyrics, videos, and podcasts, and by distributing unauthorized reproductions, synchronizations, displays, and derivative uses of these musical works to its users. Making matters worse, Spotify profits from such infringement.
Accordingly, on behalf of our members, NMPA demands that unlicensed lyrics, music videos, and podcasts be removed from the platform or Spotify will face copyright liability for continued use of these works.
We also understand that Spotify wishes to offer a “remix” feature allowing Spotify subscribers to “speed up, mash up, and otherwise edit” their favorite songs to create derivative works. Spotify is on notice that release of any such feature without the proper licenses in place from our members may constitute additional direct infringement.
NMPA further demands that Spotify preserve all electronically stored information (“ESI”), as defined by Rule 34 of the Federal Rules of Civil Procedure, along with any paper files, in Spotify’s possession, custody, or control that is relevant to use of our members’ unlicensed works. Spotify must also cease any auto-deletion operations affecting ESI relevant to this matter.
This letter is not intended as a full recitation of the facts or claims that may be made against Spotify by NMPA, its members, and/or other copyright owners, and is made without prejudice to all rights or remedies against Spotify and all others acting in concert with Spotify, including without limitation, monetary damages and attorneys’ fees as provided under 17 U.S.C. §§ 502-505.
Sincerely,
Danielle Aguierre