Spotify responds to backlash following controversial payout appeal
Spotify defends their stance regarding payout appeals, citing flaws from the Copyright Royalty Board.March 12, 2019
The new proposed procedure would force streaming services to increase royalty rates set by the Copyright Royalty Board, according to Billboard. That said, Spotify may have to increase their payouts by nearly 44 percent.
As previously reported, the increase in payouts would bump a songs’ pay from .003 cents per stream to .004 cents per stream.
However, since coming under fire for their resistance by many industry professionals and musicians alike, Spotify has since defended their position in a new blog post.
In the blog post, Spotify agrees that musicians themselves should be paid more. However, the streaming service says that there are “flaws” regarding the CRB’s structure.
“The CRB rate structure is complex and there were significant flaws in how it was set,” Spotify says. “A key area of focus in our appeal will be the fact that the CRB’s decision makes it very difficult for music services to offer “bundles” of music and non-music offerings. This will hurt consumers who will lose access to them. These bundles are key to attracting first-time music subscribers so we can keep growing the revenue pie for everyone.”
Following that, Spotify suggests that something can be done about paying musicians. However, the service clearly does not want to destroy the music industry’s advances in the area of streaming. While accusing the CRB of overlooking record labels’ demands regarding licensing rates, Spotify admits that they would be willing to adjust royalties should a more effective plan be put into play.
You can read Spotify’s statement regarding the recent backlash here.
However, even with Spotify’s statement, many industry professionals and consumers are still not sold on the streaming service’s reasoning. Check out what some had to say below.
What @spotify @amazonmusic @pandora + @google are doing is WRONG. Songwriters negotiated with DSPs in good faith while they had their fingers crossed. Paying songwriters fairly is the right thing when your revenue comes from our work. We’re subscribing to @applemusic #MusicArmy pic.twitter.com/3ZdOnqQ90C
— SONA (@wearesonaLA) March 12, 2019
So I see Spotify, Amazon, Google and a few others are objecting to the ruling that gives songwriters an increase in their royalties. Spotify – your entire business model revolves around music being viable. Respect your creators. Thankfully I still buy my music.
— Simon Smith (@Sitorimon) March 12, 2019
What do you think about Spotify’s resistance to higher payouts? Sound off in the comments below.