Politico: The streaming royalty wars return | Mechanical Licensing Collective

A LANDMARK YEAR FOR STREAMING MUSIC — The Copyright Royalty Board is set to return to the spotlight as it decides the rates that digital music services like Apple Music and Google must pay songwriters and music publishers for their work through 2027. The board, part of the Library of Congress, determines the rates for five-year periods if the groups can’t reach agreement on their own.

— Why it matters: After many years of foundering amid consumers’ transition from physical discs to digital downloads, music revenues hit an all-time high last year of $15.2 billion. That’s a new record, above the $14.6 billion from 1999 in the heyday of CDs, according to Radio & Internet News. But, although streaming subscriptions have boomed, the amount of money the streaming services must pay to provide that music remains at the same level from 2017 amid litigation over the royalty rates.

How much a particular service like Spotify or Amazon Media pays is based on factors like its number of subscribers and its revenues. More than 50 services, from big players like Pandora to the Smithsonian’s nonprofit folk music site, are subject to the board’s royalties. The money is paid to the nonprofit Mechanical Licensing Collective, created by Congress in 2018 as part of the Music Modernization Act, which then distributes it to music publishers and songwriters.

— A long process: The proposed rates for 2018 to 2022 will likely amount to somewhere between 10 percent and 15.1 percent of a streaming service’s revenue. The board had set a rate for 2018 through 2022 that significantly increased the money that digital services would pay, but a federal appeals court overturned that in August 2020. Since then, the copyright judges have been working to come up with a new rate that accords with the court decision.

In the meantime, the board has also started its proceedings for 2023 to 2027. Music publishers have proposed an even larger rate increase, amounting to 20 percent of streaming service revenue. If all goes according to plan, the board will have a proposed rate by the end of this year.

Garrett Levin, president and CEO of the Digital Media Association, which lobbies for six of the biggest streaming services, said finalizing the board’s rates could help with some of the “cognitive dissonance” within the music industry right now. “You are seeing tens of billions of dollars generated by streaming services paid out to rights holders and seeing individuals repeatedly expressing frustration with how little money is making it to them,” he told MT.

QUOTE OF THE DAY: “Corporations, at least in social media land are optimizing, maximizing revenue. You maximize revenue, you maximize engagement. To maximize engagement, you maximize outrage." — Eric Schmidt, who was Google’s CEO when it bought YouTube, now a prominent player in the social media space, on Armchair Expert with Dax Shepard.

FACEBOOK SUIT ON BOOGALOO KILLING TO TEST TECH’S SHIELD — The sister of the federal officer who was slain while providing security outside the federal courthouse in Oakland, Calif. has filed a wrongful death suit against Facebook, accusing it of promoting groups that advocated violence and connecting the men charged in the killing. Dave Patrick Underwood, a Department of Homeland Security officer, was killed in May 2020 while standing guard outside the federal building during a protest in response to George Floyd’s murder by police.

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