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U.S. Copyright Authorities to Make Subscription Music Services Increase Payout Rate to Publishers and Musicians

American copyright authorities have ruled to increase royalty payments on streaming platforms like Spotify, Apple Music, and Pandora over the next five years. On Saturday, the Copyright Royalty Board of the U.S. Library of Congress issued a written decision to adjust the revenue rates for songwriters and music publishers on streaming sites.

The National Music Publishers Association said that the ruling would require streaming companies to give 15.1% of their revenue to music publishers and songwriters, up from the current 10.5% rate for mechanical and performance royalties.

“This is the best mechanical rate scenario for songwriters in U.S. history which is critically important as interactive streaming continues to dominate the market,” NMPA chief executive David Israelite shared in a statement with Billboard.

Streaming services would continue to pay mechanical licensing fees to license music from publishers, now adjusted for the higher 15.1% rate. As it stands now, U.S. law requires the Copyright Royalty Board to determine rates for these fees, rather than allowing publishers to negotiate with streaming platforms themselves.

“Crucially, the decision also allows songwriters to benefit from deals done by record labels in the free market,” Israelite continued. “The ratio of what labels are paid by the services versus what publishers are paid has significantly improved, resulting in the most favorable balance in the history of the industry.” Read Billboard’s full report here.