Music Streamers, Songwriters, Publishers agree on new royalty increase

[UPDATED] The National Music Publishers’ Association (NMPA), Nashville Songwriters Association Int’l (NSAI), and the Digital Media Association (DiMA) have agreed on slightly higher U.S. royalty rates for songwriters and music publishers.

The DiMA represents Amazon, Apple, Google, Pandora, and Spotify,

The new mechanical streaming royalty rate will rise from 15.1% to 15.35%, phased in over five years from 2023-2027. This comes just as the Mechanical Licensing Collective has begun delivering commission-free royalty payments as set out in the Music Modernization Act (MMA).

This small negotiated increase comes not long after the U,S, Copyright Royalty Board forced a 43.8% increase for 2018 – 2022

The deal also includes changes to other components of the rate, including increases to the per-subscriber minimums and the “Total Content Costs (TCC)” calculations which reflect the rates that services pay to record labels. It also changes the treatment of “bundles” of products or services that include music streaming and updates how services can offer incentives to attract new subscribers.

Collectively the new rates and better payment system will benefit songwriters hit hard by the shift to streaming.

“This collaborative process will lead to increased songwriter compensation from digital streaming companies and locks in our historic 43.8% increase from the previous CRB proceeding,” said NSAI Executive Director Bart Herbison in a statement. “Along with the upward rate momentum there are also new structures to help ensure minimum payments.”

Bruce Houghton is Founder and Editor of Hypebot and MusicThinkTank and serves as a Senior Advisor to Bandsintown which acquired both publications in 2019. He is the Founder and President of the Skyline Artists Agency and a professor for the Berklee College Of Music.