By Kyle Thiede, Songtrust Manager of Publishing Operations
A question we often receive from clients is “I have x amount of streams, how much in royalties am I owed?” Unfortunately, the answer is quite complex. Digital service providers (Spotify, Apple, Google Play, etc.) have given consumers and artists incredible platforms for our musical preferences. There is something to be said and applauded for having access to millions of songs from platinum selling artists to the jam band down the street. If you haven’t already come to this conclusion, streaming services are here to stay and that is a great thing for the industry.
However, they, along with the entire music industry, have work to do.
The first and most pivotal begins in Washington. On March 8th, the National Publishers Association and many of the music tech services brought their respective arguments to the Copyright Royalty Board.
“The tech giants are expected to argue to reduce the amount they pay, while the National Music Publisher’s Association and the Nashville Songwriters Association International will lobby for an increase”
Currently, a stream on average equates to roughly $0.005 while only about 20% of that goes to the publisher/songwriter. Per many situations in music, the artist is often favored over the songwriter. Since 1909, mechanical royalty rates have been set by Congress which also allows compulsory licenses to be issued. Simply, this means that anyone can record your songs, as long as they agree to pay the rate. Currently for a physical or digital download that would come out to $0.091 per song in the United States. Your first reaction must be the discrepancy in those rates. The DSP’s argues that they are paying tremendous fees to license the master (artist) sides of music, which is true. Labels/distributors hold considerable power in allowing these services to have your favorite artists music available. With that said, the NMPA and publishers agree that we can no longer sit idle and allow songwriters to be subject to shrinking royalty statements. Songwriters don’t often get the fame or recognition but are an invaluable part of the industry and it is time they are treated as such. Especially when the conversation of money is revolving around multi-billion dollar organizations, who are utilizing these songs in far more ways than for consumer enjoyment. There is a clear opportunity for publishers and songwriters alike to make their mark in Washington and the argument is sound!
“As any songwriter looking at his or her royalty statement knows, current interactive streaming rates—set over ten years ago when digital streaming was just beginning—pay very little to song creators. These low royalty rates have immensely benefited large digital companies who have built thriving music services used to deliver your songs and to draw consumers into their larger “ecosystems.” While royalties paid to songwriters have remained small, giant tech companies have used your songs to sell not just music subscriptions, but also other products and services such as the Amazon Echo and Google Home devices, iPhones, Beats headphones and Amazon Prime subscriptions.”
As a songwriter, it is import to monitor what is happening in Washington regarding this situation. Be vocal and be present. This affects all songwriters and if their voices are not heard, who knows when this opportunity to even the playing field will come around again. It is time songwriters are equally compensated and respected for the art they provide to us all!
Sign a letter to the digital service providers encouraging them to work with songwriters, not against them.