Spotify has entered into a very public spat with the songwriting community over its decision to appeal the CRB’s ruling to raise streaming royalty rates for songwriters, and advocacy group Songwriters of North America (SONA) has joined the NMPA in making clear its distaste.
Co-founded by songwriters Kay Hanley, Michelle Lewis and lawyer Dina LaPolt (pictured), the group has branded the move — which is also backed by Amazon Music, Pandora and Google — disingenuous and unfair.
Just over a year ago, the Copyright Royalty Board confirmed its decision to increase the overall percentage of revenue paid to songwriters for on-demand subscription streaming from 10.5% to 15.1% — a rise of 44% — over the next five years.
Around the same time, Spotify alongside the other DSPs were working together with the creator community to get the Music Modernization Act over the line.
The MMA, which was passed into law in October, appeased both sides by giving digital services a blanket license in return for improved payments to songwriters and copyright owners.
However, Spotify’s recent appeal suggests the streaming service was biding its time before drawing battle lines with the creator community, according to LaPolt (pictured), who was a key figure in the progress of the MMA.
“Instead of acting in good faith, where we were all on board, they were secretly filing the appeal on the side after they got what they wanted in the MMA,” LaPolt told MBW today (March 11). “It does not smell as though we are one big community, which is the thing they’ve been preaching for the past three/four years since we’ve been trying to modify the copyright act legislatively.
“They were right, the music and tech [industries] do have to work as one big community, but when they do stuff like this, it makes you feel really beat up upon. The fact that Apple Music decided not to appeal the CRB ruling, but Spotify, Amazon, Pandora and Google did, is very telling.”
Hanley added: “There has been an appalling lack of understanding of their business model, especially on the part of Spotify and Pandora, who earn nearly 100% of their revenue from songs.
“I would like to know where they think their second quarter earnings will be if they piss off the people who actively give them the content that monetises their business?”
kay hanley
“I would like to know where they think their second quarter earnings will be if they piss off the people who actively give them the content that monetises their business? It doesn’t make any sense at all.”
“Apple understands the value of music, they understand what music brings to their product and we appreciate that there is a good actor in all of this.”
michelle lewis
Lewis said its the ‘middle class of songwriters’ that will be hit the hardest should Spotify succeed in reversing the CRB’s decision. “The darker prediction is that they’ll squeeze us to the point that we will disappear and will have to stop writing songs. That’s a pretty depressing prospect,” she said.
“Apple understands the value of music, they understand what music brings to their product and we appreciate that there is a good actor in all of this.”
The public moves that Spotify has made to better serve the songwriter community — the Secret Genius campaign and arrival of songwriter and producer credits — now seem disingenuous, said LaPolt.
She continued: “We are only just on the precipice of the explosion in interactive digital streaming, and the problem with Spotify is they have this free tier that has more users than the paid tier, so that is already a thorn in the side of copyright owners and music creators.
“There are two different types of courts, the court of law, and the court of public opinion. sometimes the court of public opinion can really affect your bottom line.”
dina lapolt
“On top of that, they are going to appeal the CRB ruling. It’s like songwriters are little squirrels that got a nut, and now they got a nut someone is trying to come in and take half their nut away again.
“It’s not like [Spotify] is not making money. If it was run properly, they got away from their free tier, and they brought in a company like Goldman Sachs to take a look at their costs, they could probably pay songwriters what they are due.”
LaPolt predicts an uprising of songwriters in opposition to the move – something SONA will be heavily involved in.
“Whenever you have a group publicly mobilise, it’s very effective,” she said. “We see that in everything in life, even with the MMA when we were under attack by certain special interest groups, you saw the songwriter community mobilise in a way that it never had before.
“They moved the needle and got some of their recording artist brothers and sisters mobilised with them, who control hundreds of millions of social media followers. That’s never a good look for any company, especially one that is publicly traded.
“There are two different types of courts, the court of law, and the court of public opinion, and sometimes the court of public opinion can really affect your bottom line.”
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