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STREAMERIES, NMPA TUSSLE OVER CRB RATE

Spotify, Amazon Music, Google Play and Pandora on 8/14 filed their collective appeal of the Copyright Royalty Board (CRB)'s mechanical rate determination in the U.S. Court of Appeals for the D.C. Circuit. The rate determination would see songwriters and music publishers enjoy a 44% rate increase by 2023, inching up incremnentally over several years, retroactive to January 2018. The DSPs maintain that the CRB's initial ruling was unjustified and inconsistent, included numerous legal errors and disregard for protocol, and should only date back to April 2019. 

Apple Music is the only major DSP to not join in filing this appeal, a move interpreted by some in the biz as a more pro-songwriter and pro-publisher stance. 

The National Music Publishers' Association (NMPA) also filed an appeal, stating that the CRB erred in granting certain discounts to the DSPs regarding how they tally subscribers to their student and family plans. Additionally, NMPA President and CEO David Israelite had urged DSPs several times not to appeal the initial ruling, to no avail. Israelite stated "Spotify, Amazon, Google and Pandora have now been forced to admit in court papers how they think songwriters deserve to be paid less. We will continue to fight for our win to be upheld and for the digital services to respect and value the work of the creators who make their platforms possible."

There are two distinct sides to this dilemma: songwriters and publishers, and artists and labels, want to be paid more for their precious content, upon the back of which the streaming giants have built their businesses.

Meanwhile, DSPs such as Spotify have not yet turned a profit, and consistently operate at a loss, since the majority of every dollar earned is already paid out to rights holders.  Is their model sustainable with an increased royalty burden? DSPs have hinted that any rate increase might necessitate passing that cost on to consumers, resulting in higher monthly subscription fees, but would prefer to keep music affordable for their ever-growing listener base.

The next step could be a revised ruling. The ball is now in the CRB's court, in what feels like the final minutes of a heated double-overtime playoff game, and basketball season hasn't even started yet. Pass the popcorn.

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