The United States Copyright Royalty Board has finalized a royalty increase for songwriters.
The Copyright Board proposed a 44 percent increase in streaming revenue for songwriters last year. Now it's finally a reality. However, companies like Spotify may challenge the increase in court.
Understanding the royalty increase
Last year, the Copyright Board streamlined their calculations for how companies pay for song streams. They created a new rate based on the content costs from labels or the percentage of revenue made by the song. Songwriters get whichever is greater.
In total, the change in formula creates a 4:1 ratio between labels and songwriters. Songwriters now receive a dollar for every four that major labels get from streaming apps like Pandora or Spotify. While this split certainly doesn’t appear to be completely equal (or even fair), it is an improvement.
Who stands to lose
Giant companies like Google and Apple can afford this extra cost for music streaming. Smaller organizations like Spotify and Pandora may not be so lucky.
While Apple and Google can rely on other sources of revenue, Spotify cannot. Apple has already announced they do not intend to challenge this rate increase but Spotify may have to. The added cost could force the popular company to increase subscription costs or cut content on its platform.
While it remains to be seen how this new rate will impact digital music services, it can only be a win for songwriters.
The importance of copyrights
The news is just another illustration of how important it is for creators to protect their works. Allowing copyright infringement can not only hurt your ability to earn income in the short term but could end up costing you thousands in the long term as streaming deals continue to be negotiated.
If you’re concerned that someone else is profiting off your creativity, a knowledgeable copyright attorney should be your first stop.