Music publishers and streaming platforms reach historic agreement

The National Music Publishers’ Association (NMPA), the Digital Media Association (DiMA), and the Nashville Songwriters Association International (NSAI), have this week announced a historic agreement on streaming royalties, which will take effect from 2023 through 2027. 

The headline royalty rate for songs will be set at 15.35%, and phased in over the five-year period. In addition, the deal also includes a number of changes to other components of the rate, including increases to the per-subscriber minimums and the ‘Total Content Costs (TCC)’ calculations, which reflect the rates that services pay to record labels. 

As streaming services continue to innovate to deliver songwriters’ works to growing numbers of paying fans, the changes will also modernise the treatment of “bundles” of products or services that include music streaming and updates how services can offer incentives to attract new subscribers into the music ecosystem.

In a statement, David Israelite, President & CEO for NMPA – whose members include companies such as Sony, Universal, and the Disney Music Group – said:  

“This historic settlement is the result of songwriters making their voices heard. Instead of going to trial and continuing years of conflict, we instead move forward in collaboration with the highest rates ever, guaranteed.” 

“We thank the digital services for coming to the table and treating creators as business partners. Critically, since this is a percentage rate, we know that as streaming continues to grow exponentially, we will see unprecedented value of songs.”

While a US-only deal, the organisations represent some of the most recognisable brands in global music today. The DiMA’s membership base includes companies like Amazon, Apple, Google, Pandora and Spotify, and the agreement represents a significant moment in the digital evolution of the music industry at large. 

“This agreement represents the commitment of the streaming services to bringing the best music experiences to fans and growing the streaming ecosystem to the benefit of all stakeholders, including the creative foundation of songwriting,” said DiMA President and CEO, Garrett Levin. 

“For streaming services, this moment presents an opportunity to pursue new collaborations with publishers and songwriters in the context of economic certainty that will support continued innovation. Perhaps more than anything, this agreement demonstrates the potential for industry progress when parties come to the table for good faith discussions.”

Variety Music Writer & Editor, Jem Aswad, said that the deal had come as a “surprise”, since the two sides have been locked in legal battles for some time now, with the NMPA having previously been believed to be pushing for a 20% royalty figure. 

However, when it comes to the commercial side of the industry, it seems that just like in the content, collaboration is now perceived to be the key to success ?

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