Phonorecords IV Settlement Agreement Released In Full Following Transparency Demands
Phonorecords IV Settlement Agreement Released In Full Following Transparency Demands
Earlier this week, Music Creators North America (MCNA) demanded that leading music publishers and streaming giants including Spotify reveal the precise details of their Phonorecords IV settlement. Now, the entities have released an unredacted version of the pact to the public.
The full text of the agreement submitted to the Copyright Royalty Board (CRB) by the National Music Publishers’ Association (NMPA), the Nashville Songwriters Association International (NSAI), and the Digital Media Association (which represents major streaming services including Spotify and Google) was filed late last night, and DMN obtained a copy of the document.
In brief, regarding the multifaceted situation’s background, the mentioned organizations announced in late August that they had come to an agreement for the Phonorecords IV proceeding. The promptly negotiated contract – the same parties had battled for years over the proposed Phonorecords III rate – would slightly increase songwriter and publisher royalty rates (for on-demand streaming services) from 2023 until 2027.
With a headline rate of 15.35 percent for the noted five-year stretch, the newer of the compromises is especially significant because of the relative speed with which it was reached as well as its role in cementing the much-disputed Phonorecords III rate. However, individuals and groups including songwriter George Johnson, a longtime critic of less-than-ideal mechanical rates, quickly issued demands for transparency.
The initially acknowledged Music Creators North America echoed these calls – particularly after Google and the NMPA on Monday filed a “joint notice of lodging” with the CRB.
“Our concerns in this regard are immeasurably heightened by the filing last evening of a Joint Notice of Lodging by NMPA and Google containing admissions that potentially ‘related agreements’ were executed among Google and certain of the music publisher endorsers of the proposed streaming settlement,” MCNA higher-ups said of the matter.
On the heels of the transparency-centered criticism, counsel for the NMPA, the NSAI, and the foremost stateside streaming platforms have unveiled the Phonorecords IV agreement.
Needless to say, the “execution version” of the document – which features signatures from the legal representatives for the involved streaming services – includes all manner of details pertaining to the Phonorecords IV proceeding for the next half of a decade, beginning with the definition of terms such as “family plan” and “free trial offering.”
Descriptions of “bundled subscription offerings” (as well as the payment nuances thereof) begin in earnest on page 22 of the settlement PDF, a breakdown of late payment penalties (a “late fee of 1.5% per month, or the highest lawful rate, whichever is lower,” will be levied) can be found on page 25, and the rates themselves (page 27) represent some of the many noteworthy elements within the resource.
“The Settling Participants respectfully request that the Judges inform them if there is any further information that they require,” the filing entities concluded. It remains to be seen whether the CRB will call for “any further information,” but the MCNA, while “gratified” by the deal’s release, is now pushing for the public release of any adjacent contracts inked between the NMPA and the streaming giants.
“MCNA will continue to push, as will Mr. Johnson, for the full release of all related ‘side’ agreements that may have been executed contemporaneously or in conjunction with their proposal, and looks forward to finally getting the opportunity to reviewing and commenting on the crucial, proposed royalty deal in its entirety in the coming weeks,” the entity said.
Music Creators North America welcomes increased transparency on streaming rate deal
The Music Creators North America organisation has welcomed the decision by the US National Music Publishers Association and Digital Media Association to release in full details of the deal they have done regarding the royalties streaming services will pay to songwriters and music publishers in the US over the next five years. However, MCNA is still calling for the full release of any related “side agreements”.
The deal done between the NMPA and the streaming services over what song royalty rates should be paid in the US was widely welcomed by the music community when it was announced back in August.
Those rates are ultimately set by the Copyright Royalty Board within the US because of a compulsory licence that exists in American copyright law. By reaching a deal on what the rates should be from 2023 to 2028, the publishers and streaming firms avoided having to battle it out before the CRB judges in what would have been costly and time consuming legal proceedings.
That deal still needs to be signed off by the CRB though, and as part of that process any affected stakeholders have the opportunity to comment on what has been agreed. However, as that process got underway, some songwriter groups – while glad a deal had been done – started to criticise the lack of transparency regarding the specifics of the full agreement that has been reached.
To that end, songwriter George Johnson filed a formal motion seeking to compel full disclosure of the deal, a move backed by MCNA. Despite initially opposing Johnson’s motion, the publishers and services have now approved the public release of their deal. A move that was welcomed by MCNA on Friday afternoon.
It said in a statement that it is “gratified that as a result of both the motions made before the US CRB by songwriter George Johnson and the letter of support and legal principles filed by MCNA, the trade associations for the music publishing and digital music … companies capitulated last evening to demands for transparency regarding the public release in full of their joint, proposed agreement for streaming royalty rates over the next five years”.
That said, critics still want to know about any side deals between the services and the publishers that were negotiated alongside the main deal that has been filed with the CRB.
As a result, MCNA said that it would “continue to push, as will Mr Johnson, for the full release of all related ‘side’ agreements that may have been executed contemporaneously or in conjunction with their proposal, and looks forward to finally getting the opportunity to reviewing and commenting on the crucial, proposed royalty deal in its entirety in the coming weeks”.