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'Straight Up Lies': Industry Reactions to Spotify's Royalty Rate Explanation

Xavier de Rosnay and Gaspard Auge of Justice pose in the press room during the 61st Annual Grammy Awards at Staples Center on Feb. 10, 2019 in Los Angeles.

Spotify's blog post offering its rationale for appealing court-ordered royalty rates for songwriters has been given less-than-stellar reviews from several influential figures across the music business. On Monday, the music streaming leader appealed to artists to argue that while it agrees "songwriters deserve to be paid more," it has qualms with what it deems are "flaws" in the Copyright Royalty Board's rate architecture.

In short, the CRB is boosting mechanical royalty rates on streaming services to 15.1 percent of revenue from 10.5 percent. Spotify argues that the rates fail to cover the "right scope of publishing rights," including those for video and lyrics -- a structure that it believes will make it harder to offer the kinds of non-music "bundles" that help attract new subscribers and retain old ones.

Planted firmly in the "not buying it" camp was David Israelite, the CEO and president of the National Music Publishers Association, who said on Twitter that it was a "big mistake" for Spotify to "try to deceive songwriters and artists" with the blog post.

"I didn't think Spotify could sink much lower -- but they have," he said. "This statement is one giant lie. I’m sure a PR team spent a great deal of time and energy crafting a statement to try to deceive artists and songwriters. They must think artists and songwriters are stupid. They are not. The CRB ordered a rate increase for songwriters. Spotify is against it. It really is that simple."

CVeteran music biz lawyer and creators' rights advocate Dina LaPolt, who recently called Spotify "cheap pieces of s-it," called Spotify's blog post "fake news and "straight up lies.

"Make no mistake- spotify is appealing the rate court’s decision to pay songwriters a fair wage and instead want to continue to pay below market rates. NOT GOOD for songwriter/artist… https://t.co/7zuewoMO35

— Dina LaPolt (@dinalapolt) March 12, 2019

The LaPolt co-founded Songwriters of North America (SONA) said that Spotify, along with Amazon, Pandora and Google, who are also appealing the CRB rates, are clearly in the wrong.

What spotify, amazonmusic, pandora, google are doing is WRONG. Songwriters negotiated with DSPs in good faith while they had their fingers crossed. Paying songwriters fairly is the right thing when your revenue comes from our work. We’re subscribing to applemusic #MusicArmy


— SONA (@wearesonaLA) March 12, 2019

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