Last year, the US Copyright Royalty Board (CRB) mandated that music streaming services like Spotify, Apple Music, Pandora and more would need to payout higher royalties to musicians. This new ruling meant that the major streaming services would need to pay as much as 44 per cent more in royalty fees.
Earlier this year, Google, Amazon and Spotify set out to appeal the ruling stating that the decision would harm "both music licensees and copyright owners".
Spotify, as one of the most popular streaming services, has seemingly been hit hardest by this ruling. This is partly down to how the company offers discounts for students and families, as well as access to free streaming supported by ads.
Family streaming, in particular, complicates things as up to six family members can access Spotify for just $14.99 a month. This agreement then means family plans can be treated as 1.5 subscribers per month and students are counted as 0.5 subscribers per month. It's on that basis that Spotify claims it has been overpaying songwriters and publishers.
Spotify has been speaking to Engadget about it, saying that:
"According to the new CRB regulations, we overpaid most publishers in 2018. While the appeal of the CRB decision is pending, the rates set by the CRB are current law, and we will abide by them -- not only for 2018, but also for future years in which the amount paid to publishers is set to increase significantly..."
The company is now set to recoup some of that overpayment throughout the rest of 2019. It says it wishes to minimise the impact on publishing companies but needs to account for this negative balance which is being seen as advance to musicians and publishers currently.
This new announcement by the company is likely to ruffle a few feathers with publishers.
In 2014, Time estimated artists on the service were only being paid $0.006 to $0.0084 per stream. There's often a lot of discussion around how much artists get paid from the service and this news is likely to just add fuel the fire.
This news also comes after the recent announcement that Spotify now has over 100 million users paying for premium. What do you think? Is this fair?