Artists secure 5 years of increased payment from streaming services

Streaming services such as Spotify and Google Play Music are things that I use every single day, and when you think about it, they really have changed the way people purchase and listen to music. Opening an app on your phone and having access to millions upon millions of songs is way more convenient than stocking up on physical CDs, and while consumers have benefitted greatly from this transition, the same hasn't exactly been true for songwriters and music publishers.

Up until now, royalty rates for songs on streaming services have been set at just 10.5% to be split between both songwriters and the labels that publish their music. However, the National Music Publishers' Association recently announced that this rate is being increased to 15.1% for the next five years. This will see a total increase of 43.81% during that time, and although specifics of how this will be dolled out are still up in the air, that's a lot more money in the pockets of the people responsible for creating the songs we know and love.

Per NMPA President and CEO, David Israelite:

We are thrilled the [Copyright Royalty Board] raised rates for songwriters by 43.8 percent -- the biggest rate increase granted in CRB history. Crucially, the decision also allows songwriters to benefit from deals done by record labels in the free market. The ratio of what labels are paid by the services versus what publishers are paid has significantly improved, resulting in the most favorable balance in the history of the industry.

Breaking down these numbers a bit more, the NMPA states the increased rate will see a split of $3.82 to $1 for labels to publishers. This means publishers will get a new rate of 26.2%, which is a nice bump up compared to the 21% they were previously receiving.

Talking about this, Israelite added:

While an effective ratio of 3.82 to 1 is still not a fair split that we might achieve in a free market, it is the best songwriters have ever had under the compulsory license.

For a casual listener like myself, I honestly never realized how little songwriters and publishers were paid as a result of their work being put on streaming services. It's simply something that doesn't cross my mind in the day-to-day, but now that I'm aware of what was taking place, I'm thrilled to see that steps are being taken to go in the right direction.

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Joe Maring

Joe Maring was a Senior Editor for Android Central between 2017 and 2021. You can reach him on Twitter at @JoeMaring1.

15 Comments
  • Great news! I subscribed to Google Play Music against Spotify because they paid artists more (and Apple Music more than Google but when you're not using Apple products it's just a pain in the butt). Glad to see this kind of change. It's absolutely necessary with streaming being the new reality of the music industry.
  • Hard to say what to make of this. I really don't understand the math in the article. I subscribe to Spotify Premium, so I am interested in this. What I'm not clear on is how much artists/labels are going to make on add supported streaming (Youtube, free Spotify, free Pandora, etc.) versus the paid services. If they charge too much, then it will just be a return to piracy.... Musicians will always play and record just like authors (writers, bloggers, etc.) will always write no matter how much they are paid. The glory years of record companies and music labels are probably gone forever. Just how things go. Musicians will just have to make up by live performances, which is challenging for all but the top ones. But it's just the new reality... It will be interested to follow this, as I don't think any of the premium streaming services (except satellite radio) are making any money We should get a better idea of the economics if Spotify follows through with their IPO as for the first time we will get a clear indication of the economics of streaming.
  • Artists probably will create art whether they're paid or not... But they deserve to be able to make a living. Spotify, and record companies, make a hell of a lot more off their backs than they do. Gillian Welsh wrote a song about it...
  • Meh... None of the artists I listen to are exactly living paycheck to paycheck. I'm sure I have a very limited perspective here, but I'm more concerned about this ultimately driving up the cost of my Spotify subscription :-/
  • Ha ha. The rates just went up🤣
  • Good to see the artists are coming around to digital distribution. I though only listen to regular radio but I still appreciate it. Now I wish my work would listen to terrestrial radio, XM stations have a pathetic library
  • Usually I stream - note the songs I like - and pay for them on Google Play. Then create my playlist (s).
  • seems like it will be increasing to the point where it's counter productive. lot of options for entertainment out there and being more expensive than others will make a difference
  • Return of piracy?? Interesting how this will affect prices we pay for the service...
  • And you can bet subscription fees will increase to cover this increased payout.
  • Maybe the government should enforce net neutrality on the music industry too. After all, these people shouldn't be making all that money, and we shouldn't have to pay for music. Everything should be free and open.
  • I would have no problem whatsoever with the streaming services bumping up their prices a bit as long as I knew that the extra profit was going to the artists.
  • Same. I think it'd be great if the services even offered a voluntary pay a couple bucks more with a written guarantee that every penny over the base subscription goes to the artists that you listen to. Like a tiny tiny tip jar. Actually a literal digital tip jar for your favorite artist would be pretty sweet.
  • Every time a song plays an artist gets paid right? So what are the numbers on streaming songs vs what records would have been sold to the public years back. I'm guessing that the record labels and artists are making out pretty good. I mean, there TONS of songs and/or artist that I search for all the time and play out of curiosity that I probably never would have purchased from a store. So, right there, people are getting paid. I'm I wrong?
  • Sure... but they get paid almost nothing. I was talking with the frontman for a pretty well known Industrial band and his take from streaming services on a good month? 30 bucks. Now granted - he's not top 40 material. Industrial never was. But he's been around since the 90's, had music featured in movies, game soundtracks, etc. If you know the genre then you know this band. People listen to them. And his take is 30 bucks. He works another job now because the money is gone. Money from tours? Yeah maybe when he's saved up the vacation time to get away. It's also pretty well known that most bands barely break even on tour. Smaller bands who are unknown and/or also play more obscure stuff make literally pennies. So, sure, stream their music as often as possible. Every bit helps. But for the love of all things holy buy their merch. go see their shows, because if things keep going like this, top 40 is all we're going to have left.