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Spotify Is In The Hot Seat: What Is The Real Reason?
Spotify may have made its most pivotal acquisition in 'The Joe Rogan Experience,' but it also just experienced its most thunderous controversy. And the firestorm gave artists and songwriters the opportunity to air their long-festering frustrations over the pennies on the dollar they're paid for their life's work — and this is just the latest chapter in a long saga of artists versus streamers.
This year, the United States Copyright Royalty Board will decide the new royalty rates for the mechanical licenses paid to songwriters and publishers—a decision that occurs every 5 years. There is a push from music creators for royalty rates to be changed to 20% of revenue this year from what streaming services are supposed to be currently paying them: 15.1%.
However, as the Recording Academy pointed out in a recent article, the major streaming services such as Spotify, Apple Music, YouTube (Google), and Amazon Music proposed lowering mechanical rates back down to as low as 10.5 percent — thereby trying to lower the rate they compensate songwriters. Additionally, they wish to redefine what revenue goes towards those royalties — which would generate the lowest amount of royalties paid in 15 years.
"These streaming services have increased the reach of music and certainly promoted a lot of benefit to fans and music lovers," Todd Dupler, the Recording Academy's acting chief advocacy and public policy officer, told The Washington Post. "But the return for the artists and songwriters that are trying to make a living hasn't caught up there yet."
This divide was never as stark as during the pandemic. While the streaming rates aren't make or break for A-list artists, all songwriters and independent musicians deserve fair compensation for their work. Those who rely on tours and in-person events for their living suffered greatly when live music came to a halt.
And even with concerts starting back up again, the road to recovery is a long one — and receiving fair compensation in the form of increased royalty rates would undoubtedly provide relief.
Said singer India Arie in a recent interview with Trevor Noah on “The Daily Show”, "This is just how it is; this is just what you get paid. But the labels and streaming platforms are making those decisions. And so they're telling you, This is what we've decided, this is what you get."
And as Thomas Gormon of alt-rock band Belly told Business Insider, "The focus initially starts on issues to do with Rogan, but I think what a lot of musicians and artists in our position are trying to do is use that as a way to open the conversation more into labor practices and usage."
Streaming services have invested a lot of money in expanding to podcasting. They are able to do this in part because of the revenue that music streaming has generated for the company. Meanwhile, the artists and songwriters are getting paid minimal amounts for their hard work.
How will this magnification of a longstanding issue pan out as the Spotify controversy heads into the rearview? Keep checking the Recording Academy's Advocacy page for up-to-date news on the fight to fairly compensate all music people for their tireless contributions to the soul of the nation — and world.