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.
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