Streaming Royalty Rates for Songwriters Get Significant Boost

Songwriters and publishers will make significantly more from streaming services under new royalty guidelines established under a ruling recently handed down by the Copyright Royalty Board.

Variety reports that the new streaming rates represent a jump of 43.8 percent — an increase touted as "the biggest rate increase granted in CRB history" by David Israelite, president and CEO of the National Music Publishers’ Association. "Crucially, the decision also allows songwriters to benefit from deals done by record labels in the free market," added Israelite. "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."

What the new rate means, in terms of strict dollars and cents, is that $1 of every $3.82 that goes from a streaming service to a record label will now be owed to writers and publishers. It's a more equitable split, although it still only represents an incremental step forward in terms of musicians and songwriters seeing any sort of appreciable or consistent income from streaming — a state of affairs recently summed up by songwriter and producer Rodney Jerkins, whose remarks at a Recording Academy event last September are also quoted in Variety's report.

Jerkins is one of five credited songwriters on "As Long as You Love Me," a Top 10 hit for Justin Bieber in 2012 — and although his stake in the song earned Jerkins $146,000 in performance royalties, his streaming income was a pittance, including $278 (for 38 million Pandora plays) and $218 (for 34 million YouTube streams). "If I owned 100 of the song I would have made $1,100 from YouTube,” Jerkins pointed out. "Those numbers are criminal."

There remains a significant gap, in other words, between what artists believe is fair and what streaming services are willing to pay — but as Sony/ATV chairman/CEO Martin Bandier tactfully argued, this still represents a step in the right direction. "This is a very positive ruling by the CRB as it will deliver an unprecedented top-line rate increase for songwriters and publishers over the next five years," noted Bandier. "While we are disappointed not to get the per-stream rate that we wanted, the planned rate increases go a long way to fairly compensate our songwriters for the essential contribution they make to streaming’s success story."