Mariana Orbay, ‘Songwriters v Spotify: Is Spotify the Problem or a Symptom of the Problem?’

ABSTRACT
Today, streaming is the prevailing mode of music consumption. Yet, streaming services are struggling to turn a profit, as songwriters also face significant financial challenges in the streaming era. All the while, record labels are collecting the majority of streaming revenue and seeing record profits. The 2018 Music Modernization Act attempted to address songwriters’ and streaming services’ financial problems by altering the factors considered by the Copyright Royalty Board in determining the mechanical royalty rates owed by streaming platforms to songwriters. A proper application of this newly instated factor test necessitates considering both songwriters’ and streaming services’ business operations and finances. However, during the 2018-2022 mechanical rate determinations, the majority court largely disregarded the financial interests of streaming services in determining the new mechanical rate. As a result, in February 2019, the Copyright Royalty Board raised the rate of mechanical royalties paid by streaming services to songwriters by an unprecedented 44%. This article demonstrates that Spotify’s pending appeal of the new mechanical rate is predicated on legitimate and reasonable concerns regarding the Board’s application of the law. Additionally, the article analyzes both songwriters’ and Spotify’s positions and, in addressing them, proposes two alternative solutions to the 44% mechanical rate increase.

Mariana L Orbay, Songwriters v Spotify: Is Spotify the Problem or a Symptom of the Problem?, 48 Pepperdine Law Review 785 (2021).

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