After a complex legal decision gets issued, if none of the affected parties can be seen, jubilant and dancing in the court aisles, maybe the judges got it just right? That seems to be the online consensus reaction to a recent decision by three federal judges, who in an arcane bit of copyright law that also affects the Librarian of Congress, set the royalty rates that artists get paid for outlets that play their music.
The judges, acting as the Copyright Royalty Board, recently issued new rates for streaming services, which took effect Jan. 1 and will hold sway until 2020. The rates require online radio and streaming companies to pay 17 cents per 100 plays of songs and 22 cents per 100 listens by paying subscribers to any ad-free radio offering.
Under the ruling, the musicians, who had been screaming about getting ripped off, will get a little more money; over the air, broadcast radio outlets will pay a little less. And streaming services, such as Pandora and Spotify, will fork over more. How does this absence of acrimonious reaction and rare harmony about the rates’ decision affect the music industry and its supposed dash away from old-fashioned technologies like on-air radio stations and toward Internet-based service providers, such as online radio and streaming services?
The sky hasn’t fallen since the new royalty rates were issued in December. Based on the amount of coverage given to the issue, however, and depending on which party proved most persuasive beforehand, the judges’ decision might have been more momentous. Just consider how often today’s top music industry news and headlines trumpet about how the Internet and streaming services have killed the music industry. From Adele to The Beatles to Taylor Swift, music industry coverage has focused a lot on how this popular artist is streaming or which diva won’t, or even what former artist is creating a streaming company.
This blog has written before about musicians’ howling about unfair royalty payments, particularly from streaming services. (Here’s a look at how artists get paid, by the way.) So the new rates, while not as generous as they might have wished, could be beneficial to creatives, or so goes one point of view, which, as one site wrote:
For artists, this represents a win. … The rise in the rate for non-subscription services should help to make up any shortfall, and it will encourage more players to enter the space — and that means more opportunities for music to be heard. And if you think these rates sound low, remember that performing artists aren’t paid anything when their songs are played on terrestrial radio.
Others saw in the new rates a boost for old-school, over the air broadcasters, paying, as they will, lower royalties. Whether this helps this technology stem an advancing tide that soon may sweep them away, well, let’s see. They had been the music industry’s darlings, the favored means for artists to get their products to market. Fans acknowledged their limits (there were a finite number of stations and audiences couldn’t fast-forward, replay, or otherwise control song deliveries). That was before the Internet and services that gave audiences new options, including lower charges for single song downloads.
The streaming services, meantime, have claimed all along that their profit-margins remain razor thin and their fiscal viability parlous. They recently have tried to cut all kinds of deals to improve their place in the industry. And because the new royalty rates don’t stick them as much as they might have, they said they were OK with the judges’ decision. So with all the various ways the case could have gone, it appears not to have favored any one party and its longer-term effects still leave much for consideration.