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Subscription fees likely to be increased owing to hike in royalty

Roshan Dwivedi Published on : 01 February 2018

The Copyright Royalty Board of the U.S. Library of Congress has increased the royalty rate from 10.5% to 15.1% of total revenues of streaming services to be paid to artists and their publishers. With the decision standing effective from 2018 to 2022, an increase in the subscription fee might be on cards.

Music streaming services rely on the compulsory license established under U.S. law and they do not negotiate directly with publishers, unlike Netflix and Amazon who negotiate with studios for the use of programs. This is the reason why  Netflix, Amazon Prime Video, etc. do not have an “all-inclusive” catalog like audio streaming services have.

The change in royalty rate might lead to a rise in rates paid by audio streaming giants such as Spotify, Apple, Pandora, Amazon, Google, etc. David Israelite, President, and CEO of the National Music Publishers’ Association, characterized the change as both “the most favorable balance in the history of the industry” and “not a fair split.”

Written by: Roshan Dwivedi

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