Songwriters Score Major Victory, Get 43% Pay Increase from Streaming

Songwriters scored arguably their biggest victory in Washington, well, ever. Last week, the Copyright Royalty Board ruled to increase pay from streaming services to songwriters and publishers by nearly 44% over the next five years.

So what does that mean? It means songwriters have hope.

Streaming services led by companies like Apple, Amazon, Pandora and Spotify now must pay songwriters 15.1% of their revenue. The previous rate was 10.5%.

But there's still a long ways to go for songwriters. While record labels and others negotiate payment rates directly with streaming services, those who pen songs just don't have that luxury.

More than any other part of the industry, songwriters and publishers are at the mercy of Washington D.C. Specifically, the Copyright Royalty Board. Three judges make up the board, which gathers every few years to evaluate payment rates.

But as we've seen, the music industry moves much quicker than Washington. With interactive streaming now dominating the market, writers weren't seeing fair payments. The new rates help with the disparity.

Though the ratio between what labels get paid versus what writers and publishers get paid is still pretty large. For every $3.82 a record label gets, writers and publishers get $1.

Led by the National Music Publishers' Association and the Nashville Songwriters' Association International, creatives hoped to get a flat per-stream rate. That didn't happen. Instead, the payment comes as a calculation of revenue percentage or "content costs." Those "costs" are the aforementioned agreements made with record labels.

Still, despite not getting a per-stream rate, publishers are very happy. "The bottom line is this is the best mechanical rate scenario for songwriters in U.S. history," says NMPA president David Israelite. "Which is critically important as interactive streaming continues to dominate the market."

READ MORE: Country Songwriters are Fighting Labels, Congress for Fair Pay

In additional good news, legislation dubbed the Music Modernization Act has a good shot at making it through Congress. It would be the first major overhaul of music copyright law in two decades, an effort that has support from all the major players in the industry.

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Songwriters Score Major Victory, Get 43% Pay Increase from Streaming