Songwriters dealt blow in Spotify royalty rate battle as streaming platforms are granted ‘procedural victory’ in US Appeals Court

Digital services including Spotify, Amazon Music and YouTube have reportedly secured a “procedural victory” in their bid to overturn the 2018 Copyright Royalty Board (CRB)’s ruling that would see a 44% increase to streaming royalty rates paid to songwriters in the US.

Fear not, songwriters: this doesn’t mean said platforms have won their appeal to bring down the rate (they still could, however). But it’s not good news for you, either.

According to Billboard’s sources, the US Court of Appeals has “thrown out the rate structure cobbled together by a majority of the board’s three judges”.

Billboard quotes industry sources as stating that the Appeals court “vacated most of [the Phonorecords III CRB decision], including tossing out the rates and structures” and also that the “the appeal court remanded for procedural issues or further explanation”.

National Music Publishers Association President David Israelite, clarified on Twitter yesterday that “the appellate decision which is still under seal is a remand on some technical issues and was not about the top line rate increase”.

This means is that the ruling, which is yet to be made public, appears to be on the procedure used to work out the songwriter royalty rates – and not the actual rates themselves.

The latest news comes just over two years after songwriters in the US enjoyed a major victory (in January 2018) when the US Copyright Royalty Board (CRB) ruled that royalty rates for streaming and other mechanical uses would rise to 44% in the market in the five years between 2018 and 2022.

That decision was ratified in February last year, when the CRB published the final rates and terms for songwriters.

At the time, NMPA President & CEO David Israelite warned that digital music companies would ‘declare war on songwriters’ should they appeal.

The following month (March 2019) saw the likes of Spotify, Google, Amazon and Pandora (but not Apple) do just that – they opposed the ruling, in what the NMPA equated to “suing songwriters”.

Spotify’s decision drew criticism from the likes of Irving Azoff, Justin Tranter and other leading music industry figures, while advocacy group Songwriters of North America (SONA), co-founded by songwriters Kay Hanley, Michelle Lewis and lawyer Dina LaPolt, swiftly condemned the move.

In April 2019,  over 90 hit songwriters including Emily Warren, Frank Dukes, Greg Kurstin, Nile Rodgers wrote to Spotify founder Daniel Ek calling on him to cancel the streaming firm’s appeal.Music Business Worldwide

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