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The Copyright Royalty Board this past weekend ruled on a long-running music streaming royalty case in the U.S., favoring songwriters and music publishers in a decision that increases the royalties paid out by streaming music services by more than 40 percent (via The Wall Street Journal).

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Now Apple Music, Spotify, Amazon Music Unlimited, Pandora, and other streaming music services will be required to pay 15.1 percent of their revenue to songwriters and publishers, increasing from 10.5 percent. Companies with "less diversified" services like Spotify and Pandora -- which are focused on streaming music -- are predicted to be hit the hardest, while Apple, Google, and Amazon are "unlikely" to be fazed by the ruling.
A federal copyright board has raised the music streaming royalties for songwriters and music publishers by more than 40% to narrow the financial divide separating them from recording labels.

"Songwriters desperately need and deserve the rate increases," said Bart Herbison, executive director for the Nashville Songwriters Association International, another trade group.
The new royalties will "narrow the financial divide" separating songwriters and publishers from recording labels, although the National Music Publishers' Association estimated labels will still receive $3.82 for every $1 paid to the former group. Before this past weekend's ruling, the trial over music streaming royalties had been ongoing for the past year, igniting after paid streaming music services gained popularity over owning or downloading individual songs and albums.

In terms of record labels, last summer Apple began seeking to reduce the share of revenue record labels get from streaming music as it worked to establish new deals for Apple Music and iTunes. The company did just that in a deal struck with Warner Music Group, achieving a lower rate for the label that includes artists like Ed Sheeran, the Red Hot Chili Peppers, Bruno Mars, and more.

Article Link: New Ruling Raises Music Streaming Royalties for Songwriters on Apple Music, Spotify, and More
 
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Hal~9000

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Sep 13, 2014
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This is the problem for customers of subscription models vs just owning things. It seems like everything nowadays is switching over to subscription models so they can increase prices on us whenever they feel like it.

Kinda sucks as I like the concept of music streaming services (i.e. Pandora) in order to find new songs to download... but that I know the music labels will ruin things over time by being greedy and continually raising royalties.
 
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Nr123*123

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And there were those here claiming that Apple was the godsend for music streaming, because they paid artists fairly.

Doesn’t look it like it huh?
 
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ke-iron

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Apple has the money, software services, connections etc. Why haven’t Apple opened their own studio yet??? They have the world biggest music platform. Surely they can create the music in house and sell on their own music store and to others.
 
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Darmok N Jalad

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I’m somewhat conflicted on streaming. While streaming has conveniences and owning all your music can get expensive, I’ve seen it happen more than once where a song on my playlist disappeared from Amazon Music. It was still on the list, but I got an error saying that this content was no longer available. I guess you still get a huge library to chose from, but knowing something can just disappear changed my perspective. I’m back to buying more music, especially from the artists I really like.
 
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Abazigal

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And there were those here claiming that Apple was the godsend for music streaming, because they paid artists fairly.

Doesn’t look it like it huh?
Their rates are better than those paid by Spotify, if you are looking to throw stones.
 
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ke-iron

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I’m somewhat conflicted on streaming. While streaming has conveniences and owning all your music can get expensive, I’ve seen it happen more than once where a song on my playlist disappeared from Amazon Music. It was still on the list, but I got an error saying that this content was no longer available. I guess you still get a huge library to chose from, but knowing something can just disappear changed my perspective. I’m back to buying more music, especially from the artists I really like.

Yes this could happen at anytime. Sometimes I guess the owner of the song no longer want it on the store. This happened to me recently on Apple Music. I added an album and listened to it for a couple days, before I got the chance to buy it, one of the best songs were no longer available. So now I’m not buying the album at all.
 
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rctlr

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May 9, 2012
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They should really be taking that out of the chunk the labels are claiming, it's really absurd that labels continue to exist in this day and age.

It's expensive, producing the tracks professionally, advertise and distribute in multiple formats around the world.

If the artist can afford to do it, then the best of luck to them.

I dont know why people are against labels.
How much the artist is paid, is between the artist and the label.
 
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jonnyb098

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Nov 16, 2010
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The pain just keeps mounting for Spotify. We’ll see what their subscriber numbers are once their free tier goes away.
My thoughts exactly. Now they will be bleeding even more cash. People say I'm nuts but theres absolutely no way for Spotify to offer a free tier anymore. Its just not sustainable.
 
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unobtainium

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Mar 27, 2011
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I can’t believe people actually use the free tier on Spotify. The full price is less than the cost of one album per month. It’s crazy good value. $4.99 if you’re a student.
 
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69Mustang

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I can’t believe people actually use the free tier on Spotify. The full price is less than the cost of one album per month. It’s crazy good value. $4.99 if you’re a student.
As with everything, it's a value proposition. You and I might value music and think a $10 monthly sub is worth it. Bill and Susan might place music much further down their values list so a free tier is all they want. Steve and Jake might be somewhere in between decide to share a family plan with a group of other like minded friends.

I pay $60 for XBox Live. I think it's a good deal. You may think I'm wasting $60. Value. It's different for everyone.
 
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Carnegie

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This rate increase happens over 5 years. The new rate for 2018, e.g., is 11.4%. That gives services like Spotify and Apple Music more time to continue negotiating better deals with recording rights-holders to offset this increase in what they'll be paying to holders of songwriter rights. Spotify and Apple Music in particular are gaining more leverage such that they should be able to get (at least marginally) better deals from music labels (or other recording rights-holders).

The subminimum II non-pass through rate is also being increased. It will be the same 22% for 2018 but climb to 26.2% for 2022. That shouldn't, for the most part, matter though. The record labels would have to be getting around 58% of service revenues, for recording rights, for that alternate minimum rate to apply rather than the 15.1%.

I wonder whether the per-subscriber minimums (for paid services) will also be increasing. I didn't see any reference to them on the Copyright Royalty Board's website.
 
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neuropsychguy

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As with everything, it's a value proposition. You and I might value music and think a $10 monthly sub is worth it. Bill and Susan might place music much further down their values list so a free tier is all they want. Steve and Jake might be somewhere in between decide to share a family plan with a group of other like minded friends.

I pay $60 for XBox Live. I think it's a good deal. You may think I'm wasting $60. Value. It's different for everyone.
Well considering you can regularly purchase 1 year Xbox Live subscriptions for $40 a month (Amazon had 6 months for $15 about 1 week ago), paying $60/year isn't a great deal - that's normal price. :)
 
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diego

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Dec 21, 2003
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I’m somewhat conflicted on streaming. While streaming has conveniences and owning all your music can get expensive, I’ve seen it happen more than once where a song on my playlist disappeared from Amazon Music. It was still on the list, but I got an error saying that this content was no longer available. I guess you still get a huge library to chose from, but knowing something can just disappear changed my perspective. I’m back to buying more music, especially from the artists I really like.

THIS. This happens to me all the time with Apple Music... especially with tracks that are more rare (b-sides, unreleased, etc) are more prone to be removed from the service. What annoys me about Apple Music (and others) is the heavy focus on promoting and showcasing mostly radio friendly pop, hip hop, etc. Just extremely commercialized.
 
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neuropsychguy

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OldSchoolMacGuy

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Apple Music already pays artist nearly double what Spotify does.

This move won't likely require Apple to pay artists more. It will certainly hurt Spotify, as they already aren't making a profit (losing more than $500 million last year and even more the year before). It'll mean even less revenue per song played. Could really kill that service as it already struggles.
 
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Carnegie

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May 24, 2012
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And there were those here claiming that Apple was the godsend for music streaming, because they paid artists fairly.

Doesn’t look it like it huh?

The rates at issue here (i.e. applicable to interactive services and limited downloads; for songwriter's rights) are set in accordance with law. Apple doesn't decide what they are.

Further, these rates are more or less in line with the standard rate (for the same rights), set in accordance with law, for physical and digital sales of music. Actually, these interactive service rates are higher than (i.e. represent a larger portion of the revenue collected) what is often the case for physical and digital sales of music. For the latter, the royalty rate is 9.1 cents per song plus 1.75 cents per minute (over 5) if the song is longer than 5 minutes. So, if the digital purchase of a song (which is under 5 minutes) costs $1.29, about 7% of the revenue is going to songwriter's rights. If it cost $.99, about 9% is. If an album costs $14.99 and has 20 songs (which are under 5 minutes) on it, about 12% of the revenue is going to songwriter's rights. If it costs $9.99 and has 10 songs on it, about 9% is.
 
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OldSchoolMacGuy

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They should really be taking that out of the chunk the labels are claiming, it's really absurd that labels continue to exist in this day and age.

Artists are completely free to publish without a label. Good luck doing so. You're completely ignoring the HUGE advantages a label brings to the table. Production, marketing, distribution, and much more are all handled by a label. Artists wouldn't see nearly the success they do now without the huge money labels put behind them.

There's no requirement to use a label. But good luck seeing much success without their help.
 
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Carnegie

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May 24, 2012
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Apple Music already pays artist nearly double what Spotify does.

This move won't likely require Apple to pay artists more. It will certainly hurt Spotify, as they already aren't making a profit (losing more than $500 million last year and even more the year before). It'll mean even less revenue per song played. Could really kill that service as it already struggles.

This change will mean that Apple pays songwriters (or, e.g., publishers) more, unless (possibly, depending on other changes which might have been made) the subscription price for Apple Music is reduced. Regardless, the amount Apple pays songwriters will increase as a portion of its Apple Music revenues.

Spotify pays rights-holders less per-stream on average mostly because it has a free, ad-supported, service. The revenue generated by free, ad-supported, services is dramatically less per subscriber than that which is generated by paid services. That results in significantly lower per-stream payments to rights-holders. The reported average per-stream rates which we've typically seen, for Spotify, combined both kinds of services. That's why the per-stream Spotify rates which we've seen have been significantly lower than Apple's.
 
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thisisnotmyname

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Oct 22, 2014
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Artists are completely free to publish without a label. Good luck doing so. You're completely ignoring the HUGE advantages a label brings to the table. Production, marketing, distribution, and much more are all handled by a label. Artists wouldn't see nearly the success they do now without the huge money labels put behind them.

There's no requirement to use a label. But good luck seeing much success without their help.

This is a very 1980s view of the music industry though. The days of needing expensive studio time with multi-million dollar Nieve console to make a pop/rock/rap album are over. Back in the 2000s you could already put together a decent home studio on a modest budget and produce a distortion filled and compressed pop/rock album. Distribution? Hello streaming. Marketing is the last bastion of the labels and once the streaming giants get a really good AI for recommendations they can kiss that goodbye too. In the meantime the labels are abusing the lottery mentality of a lot of young artists and completely owning them with a pittance in compensation. It's really ridiculous.
 
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69Mustang

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Well considering you can regularly purchase 1 year Xbox Live subscriptions for $40 a month (Amazon had 6 months for $15 about 1 week ago), paying $60/year isn't a great deal - that's normal price. :)
This misses the point. It's not about the cost of XBL. It's about whether or not someone finds value in the XBL, AM, or whatever service is on offer.

I've been an XBL member for 11 years. I've never paid full price 'cept the first year. I just used the $60 because that's the listed price.
 
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Madhava

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Mar 23, 2017
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Apple Music already pays artist nearly double what Spotify does.

This move won't likely require Apple to pay artists more. It will certainly hurt Spotify, as they already aren't making a profit (losing more than $500 million last year and even more the year before). It'll mean even less revenue per song played. Could really kill that service as it already struggles.

Can't Spotify go the way of ads for free tier? What is the difference for free and paid versions?
 
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