Music industry avoids legal battle with new streaming royalty deal

The deal marginally increases royalties but may benefit publishers in other ways.

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Music publishers, songwriters and musicians have struck a deal with streaming services for US mechanical streaming rates for 2023-2027, the National Music Publishers’ Association (NMPA) has announced. The NMPA, Nashville Songwriters Association International (NSAI) and Digital Media Association (DiMA) agreed on a 15.35 percent rate, avoiding a potentially contentious battle.

That's up only mildly from the 2018-2022 rate of 15.1 percent. It's also less than expected, according to Variety, as the NMPA previously said it was pushing for 20 percent. However, the agreement will reportedly also modernize the way "bundle" rates offered to students and families are treated, and increase so-called Total Content Costs, to make up some of the difference.

"This agreement... ensures that all parties will benefit from the growth of the industry and will be motivated to work together to maximize that growth," the press release states. "Instead of going to trial and continuing years of conflict, we instead of move forward in collaboration with the highest rates ever, guaranteed," added NMPA's CEO David Israelite.

Last time, a legal battle between the parties dragged on for three years. The 15.1 percent rate for the 2018-2022 period was decided in 2018, but Spotify, Amazon Music, YouTube and Pandora appealed the ruling, arguing it would be untenable for their business model. Publishers and songwriters prevailed earlier this year, as the Copyright Royalty Board reaffirmed the 15.1 percent rate.