On this Music Business Worldwide podcast, MBW founder Tim Ingham is joined by David Israelite, the President and CEO of the National Music Publishers' Association.
We probably don't need to ask you to guess which particular controversial topic Israelite and Ingham discuss.
Earlier this month, Spotify announced that it was changing the way it calculates mechanical royalty payments for songwriters and publishers in the US.
Spotify has re-categorized its Premium subscription tiers in the States as 'bundles,' enabling it to pay out a lesser mechanical royalty rate to songwriters than it would if said Premium tiers were classified as pure music services.
Spotify believes it is entitled to re-categorize these tiers as 'bundles' due to the fact that SPOT now offers access to music plus audiobooks.
The idea that 'bundled' services should be entitled to a lower mechanical royalty rate (vs. standard music subscription services) was enshrined in the so-called 'CRB IV' agreement/settlement between publishers and Spotify in the States, signed in 2022, and covering the years 2023-2027.
As David Israelite explains on this podcast, the NMPA is currently considering legal action against Spotify that would seek to undo the newly-lowered 'bundle' mechanical royalty rate on the service.
This isn't the first time that Spotify and songwriters have butted heads, of course: In 2019, the US Copyright Royalty Board (CRB) decreed that Spotify and other streaming services needed to increase the headline mechanical royalty rates they paid publishers and songwriters in the US for the period covering 2018-2022.
That decision from the CRB (in the so-called 'CRB III' process) followed a campaign of lobbying and general legal cajoling from the NMPA, on behalf of songwriters and publishers.
Spotify (and Amazon) subsequently appealed this ('CRB III') ruling, attempting to drive down the mechanical royalty rate they paid songwriters under US law.
The CRB, though, stood firm – and told the streamers they must increase their rate.
Now, with its 'bundle' reclassification under 'CRB IV', Spotify is once again attempting to push down the percentage of its revenue that it must, by law, pay to songwriters and publishers in its biggest market.
Will Spotify ultimately get away with it? Stay tuned.
As Israelite confirms on this podcast: "This will likely end up in a legal conflict..."
Popular Podcasts
My Favorite Murder with Karen Kilgariff and Georgia Hardstark
My Favorite Murder is a true crime comedy podcast hosted by Karen Kilgariff and Georgia Hardstark. Each week, Karen and Georgia share compelling true crimes and hometown stories from friends and listeners. Since MFM launched in January of 2016, Karen and Georgia have shared their lifelong interest in true crime and have covered stories of infamous serial killers like the Night Stalker, mysterious cold cases, captivating cults, incredible survivor stories and important events from history like the Tulsa race massacre of 1921. My Favorite Murder is part of the Exactly Right podcast network that provides a platform for bold, creative voices to bring to life provocative, entertaining and relatable stories for audiences everywhere. The Exactly Right roster of podcasts covers a variety of topics including historic true crime, comedic interviews and news, science, pop culture and more. Podcasts on the network include Buried Bones with Kate Winkler Dawson and Paul Holes, That's Messed Up: An SVU Podcast, This Podcast Will Kill You, Bananas and more.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com