“We believe the rates set by the CRB do not reflect a market price for music and will erode the value of music in our economy.”
SoundExchange is not hiding its disappointment at new webcasting royalty rates set by the US Copyright Royalty Board yesterday.
As reported on MBW, the CRB set the ad-funded per-stream rate to be paid to recorded music rightsholders by the likes of Pandora at $0.0017 for 2016.
This is $0.0003 more per stream than is currently paid out, but falls short of the hopes of many in the music industry.
Also, this rate will only apply for definite in 2016 – the following four years (2017-2020) will be determined by fluctuations in the US Consumer Price Index, which could bring the rate back down.
“We believe the rates set by the CRB will erode the value of music in our society.”
In addition, Pandora was previously paying $0.0025 per stream for those paying customers on its subscription tier. As the result of a separate CRB ruling, this falls to $0.0022 per stream.
Pandora’s shares shot up 19.4% after hours last night as a result of the decision.
“Music has tremendous value and is the core foundation of the webcasting industry,” said a statement from SoundExchange, which was lobbying for a $0.0025 per ad-funded stream rate.
“It’s only fair that artists and record labels receive a market price when their music is used. We believe the rates set by the CRB do not reflect a market price for music and will erode the value of music in our economy. We will review the decision closely and consider all of our options.
“Additionally it is deeply disappointing to see that broadcasters are being given another unfair advantage. In their terrestrial business they do not pay a dime for the recordings they use and now this $17B industry will receive an additional huge subsidy on the music they use in webcasting.
“As music advocates, SoundExchange represents the entire recorded music industry and we remain united on the principle that recording artists and rights owners deserve a fair market rate when their music is used.
“SoundExchange appreciates the efforts of the CRB judges and staff throughout this process.”Music Business Worldwide