Apple breaks with digital music competitors, will not appeal songwriter royalty increase
Major digital music and streaming services Amazon, Google, Pandora and Spotify on Thursday filed separate appeals of a U.S. Copyright Royalty Board ruling that greatly increases royalty rates paid out to songwriters. Apple is conspicuously absent from the list of appellants.
The filings, lodged with the U.S. Court of Appeals for the District of Columbia Circuit, represent a unified effort to disrupt the CRB's 2018 decision to grant writers a 44 percent bump in mechanical royalty rates, reports Variety.
Google, Pandora and Spotify laid out their collective grievance in a joint statement:
"The Copyright Royalty Board (CRB), in a split decision, recently issued the U.S. mechanical statutory rates in a manner that raises serious procedural and substantive concerns. If left to stand, the CRB's decision harms both music licensees and copyright owners. Accordingly, we are asking the U.S. Court of Appeals for the D.C. Circuit to review the decision."
Amazon is thought to be appealing the CRB ruling for similar reasons. That the online retail giant also filed its appeal on the same day as Google, Pandora and Spotify suggests it is associated with, or was aware of, the collective effort to fight royalty increases.
Apple Music did not appeal the CRB ruling, and Variety sources say the company does not intend to do so in the future. The move was lauded by songwriter organizations, including the National Music Publishers' Association, which is expected to file its own notice of appeal.
"We thank Apple Music for accepting the CRB decision and continuing to be a friend to songwriters," said David Israelite, president and CEO of the NMPA. "While Spotify and Amazon surely hope this will play out in a quiet appellate courtroom, every songwriter and every fan of music should stand up and take notice. We will fight with every available resource to protect the CRB's decision."
In simple terms, mechanical royalties are reimbursements paid to license holders when a song is reproduced and distributed, whether it be a physical pressing, digital sale or stream. The advent and proliferation of streaming services has complicated the reimbursement structure, while the lack of an adequate accountability apparatus further dilutes already low per-play rates for artists.
Actions by the CRB, as well as the Music Modernization Act, seek to bring aging copyright legislation up to speed in a bid to better cope with a fast-moving digital music industry.
Apple, which bills itself as a friend of musicians and songwriters, has in the past attempted to address artist complaints. In 2016, roughly a year after Apple Music launched, the company issued a proposal to the CRB calling for a flat royalty rate on streaming content.
The filings, lodged with the U.S. Court of Appeals for the District of Columbia Circuit, represent a unified effort to disrupt the CRB's 2018 decision to grant writers a 44 percent bump in mechanical royalty rates, reports Variety.
Google, Pandora and Spotify laid out their collective grievance in a joint statement:
"The Copyright Royalty Board (CRB), in a split decision, recently issued the U.S. mechanical statutory rates in a manner that raises serious procedural and substantive concerns. If left to stand, the CRB's decision harms both music licensees and copyright owners. Accordingly, we are asking the U.S. Court of Appeals for the D.C. Circuit to review the decision."
Amazon is thought to be appealing the CRB ruling for similar reasons. That the online retail giant also filed its appeal on the same day as Google, Pandora and Spotify suggests it is associated with, or was aware of, the collective effort to fight royalty increases.
Apple Music did not appeal the CRB ruling, and Variety sources say the company does not intend to do so in the future. The move was lauded by songwriter organizations, including the National Music Publishers' Association, which is expected to file its own notice of appeal.
"We thank Apple Music for accepting the CRB decision and continuing to be a friend to songwriters," said David Israelite, president and CEO of the NMPA. "While Spotify and Amazon surely hope this will play out in a quiet appellate courtroom, every songwriter and every fan of music should stand up and take notice. We will fight with every available resource to protect the CRB's decision."
In simple terms, mechanical royalties are reimbursements paid to license holders when a song is reproduced and distributed, whether it be a physical pressing, digital sale or stream. The advent and proliferation of streaming services has complicated the reimbursement structure, while the lack of an adequate accountability apparatus further dilutes already low per-play rates for artists.
Actions by the CRB, as well as the Music Modernization Act, seek to bring aging copyright legislation up to speed in a bid to better cope with a fast-moving digital music industry.
Apple, which bills itself as a friend of musicians and songwriters, has in the past attempted to address artist complaints. In 2016, roughly a year after Apple Music launched, the company issued a proposal to the CRB calling for a flat royalty rate on streaming content.
Comments
/s
Apple is getting portrayed favourably as a friend to the arts by not appealing the increase.
Increased Apple hardware sales.
+
Increased Apple Music subscriptions
=
Apple makes more money than the difference in royalties.
Amazon and the rest probably think the songwriters should drive Ubers to make ends meet.
(Enter Judge Koh, stage left)
(Queue: The People's Court theme)
/s m'kay?
Forgot "Enter Amazon" against Apple for paying writers.
In the short term, this will hurt Apple’s Services revenue, and users may need to expect a modest price increase across all the music-streaming services to cover the increased costs of the material that forms the core of these services. I think we’re looking at $12 a month rather than the present $10/month level, but I don’t think this will happen for another couple of years.
In the medium-term, artists telling their fans to use Apple Music rather than the others because of their opposition to actually paying songwriters fairly will prove to have been a big mistake by Apple’s streaming rivals. Long term, once this is settled equilibrium will set in and the services will be roughly equal again.
Well it's true, there is seldom anything altruistic in business.
The problem is Spotify expecting the artists to take a hit so that it can make a profit.
If it cannot make a profit, it should quit. It can't say "I'll distribute your content and make money, but you, as the creator of the content shouldn't expect much."
How easy it is to compete and play the good-guy with massive cross-subsidizing.
Just take notice what J. Iovine stated about AppleMusic profitability when leaving
...and yes Apple will garner some good PR with the performers by not opposing this increase for the writers. Smart to let others complain, there's plenty of others to deal with the business/legal stuff, keep Apple out if it.