Spotify vs. songwriters: Sony/ATV’s Martin Bandier and Warner/Chappell’s Carianne Marshall urge composers to fight royalty rate challenge

Outgoing Sony/ATV boss Martin Bandier, who reportedly earned a personal fortune in the region of $100m from Sony’s recent acquisition of EMI Music Publishing, believes Spotify isn’t sharing enough of its revenue with songwriters.

In a new letter to Sony/ATV’s songwriters, Bandier has slammed an appeal from Spotify, Amazon, Google and Pandora against new statutory streaming rates announced by the US Copyright Royalty Board last year.

These appeals are intended to reverse the CRB’s decision, which would see streaming royalties paid to songwriters and publishers in the States rise by at least 44% by 2022.

Apple Music was, famously, the only tech giant to refuse to appeal the CRB rate decision.

Bandier, who is set to leave Sony/ATV after 12 years later this month, said: “I am incredibly disappointed that Spotify and the other companies have chosen to attack songwriters by appealing the long-overdue rate increases. The move flies in the face of everything that I have fought for on behalf of songwriters for fair-market rates.

“Songwriters are unquestionably the most important contributors to the success of the streaming services and deserve the benefits of the new rates that we worked so hard to achieve.”


Another major publishing leader, Warner/Chappell’s co-Chair Carianne Marshall, has also made a public statement in reaction to Spotify et. al’s CRB appeal.

In her open letter, Marshall called on songwriters to lend their support to the National Music Publishers’ Association’s fight to uphold the new streaming royalty rates.

“We value our relationships with the companies who help us deliver music to fans, but we have to draw a line on this issue.”

Carianne Marshall, Warner/Chappell

“We value our relationships with the companies who help us deliver music to fans, but we have to draw a line on this issue,” says Marshall.

“Their attempt to roll back rates fairly determined through the CRB process is unacceptable. As such, we will vigorously seek to protect the value of music and passionately promote the rights of songwriters.”


Sony/ATV and Warner/Chappell certainly have one powerful ally in their support of the CRB’s new rates; one with a market cap of $882 billion, in fact.

Earlier today (March 15), Apple directly and publicly attacked Spotify for its legal appeal against the CRB ruling.

Said Apple in a company statement: “Underneath the rhetoric, Spotify’s aim is to make more money off others’ work. And it’s not just the App Store that they’re trying to squeeze — it’s also artists, musicians and songwriters.

“Just this week, Spotify sued music creators after a decision by the US Copyright Royalty Board required Spotify to increase its royalty payments.

“This isn’t just wrong, it represents a real, meaningful and damaging step backwards for the music industry.”

You can read the new letters from Martin Bandier (first) and Carianne Marshall (second) to their company’s songwriters below.


Dear Songwriter,

I am writing to update you about some important developments for songwriters in the U.S. regarding the mechanical royalty rates that the Copyright Royalty Board set last year.

As you may recall, in January 2018 the CRB set a series of new rates that include an increase to the statutory mechanical rate for on-demand streaming from 10.5% of revenue to 15.1% of revenue over the period 2018 to 2022. This was a significant victory for songwriters.

However, the hard-fought win is now under threat as Spotify, Amazon, Google and Pandora have filed notices to appeal these rates. Apple has decided not to appeal. If Spotify and the other streaming services are successful with this appeal, it may result in a reduction in the royalty payments that songwriters will receive from the streaming services. As a result, the National Music Publishers’ Association (NMPA) has announced that it will also file an appeal but will withdraw that appeal if the services do the same.

I am incredibly disappointed that Spotify and the other companies have chosen to attack songwriters by appealing the long-overdue rate increases. The move flies in the face of everything that I have fought for on behalf of songwriters for fair-market rates. Songwriters are unquestionably the most important contributors to the success of the streaming services and deserve the benefits of the new rates that we worked so hard to achieve.

Below are links to some news articles that provide useful information about the issue:

Billboard: NMPA Chief David Israelite Shares Point-by-Point ‘Fact Check’ of Spotify’s Royalty Rate Appeal Explanation

Music Business Worldwide: If Spotify thinks songwriters deserve more money, why is it trying to cut their pay?

Variety: NMPA Issues Fiery, Point-by-Point Response to Spotify’s Royalty Appeal

Hits: http://hitsdailydouble.com/news&id=315619&title=NMPA-CHIEF-TAKES-ON-SPOTIFY

While Sony/ATV will work diligently and closely with the NMPA to protect these new rates, there are no more important or effective voices on this issue than those of songwriters themselves. I therefore urge you to make yourselves heard and to speak out against this appeal. At the same time, we will be sure to update you as events develop.

Regards,

Martin Bandier

Chairman & CEO

Sony/ATV Music Publishing


Hello,

You may have heard about the tech companies’ appeal of a recent CRB ruling, and we wanted to make sure you were clear on our stance on this crucial issue.

Last year, the Copyright Royalty Board (CRB) granted an increase of the compulsory mechanical rates paid to songwriters – from 10.5% to 15.1% over the next five years. The decision came after rigorous consultation with many parties, including a wide range of tech companies, as well as songwriters and music publishers. There were strong arguments made on both sides, and the resulting rate increase was fair as well as overdue.

That is where the debate should have rested. Instead, last week, Spotify, Amazon, Google and Pandora submitted an appeal of the CRB decision, apparently with the aim of reducing or eliminating the rate increases granted to songwriters by the CRB. The National Music Publishers’ Association (NMPA) and other trade bodies, of which Warner/Chappell is a member, are being very vocal in their opposition to this appeal. 

We value our relationships with the companies who help us deliver music to fans, but we have to draw a line on this issue.  Their attempt to roll back rates fairly determined through the CRB process is unacceptable.  As such, we will vigorously seek to protect the value of music and passionately promote the rights of songwriters.

We are working with NMPA and policy makers in DC to defeat the appeal. We also encourage you to lend your support to NMPA by retweeting them here

If you have any questions, we’re always here to talk.

Carianne 

Music Business Worldwide

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