Under the current regime, all labels, artists and distributers are paid the same royalty rate from every streaming service or licensing operator like SoundExchange regardless of their size or genre. However this fundamental truth in the music industry could potentially get changed with the Copyright Royalty Board asking the Copyright Office whether or not it can set different rates for different music suppliers. With this review coming in the next few weeks, WIN, (the Worldwide Independent Network) has released a statement on their view of a potential decision, which could shake the music industry to its core.
"The worldwide independent industry calls for the maintenance of single rate collective licensing in the US as it ensures that there can be no discrimination towards artists and companies in an already highly competitive market place. To create imbalances in what companies and the artists signed to them receive from digital transactions will simply cause harm, and not serve expansion of choice for the consumer and for the creative community."
Opinions are varied as to why the board has decided to bring up this rate for review, but one of the main points agreed upon by insiders is that it could create a system where majors with their stable of bigger, more lucrative artists are given a higher royalty rate than independent labels with their smaller, but still important artists that help push music creatively on the fringes.
The board has not revealed their exact intentions, so a lot of this is speculation, but in the next few weeks we will learn exactly what they are up to, which could have massive ramifications on artists, producers, songwriters, engineers and everyone who works in and around the music industry.
As WIN says in their statement, a decision that favors the majors -- Universal, Warner and Sony, "will have disastrous consequences for the whole industry."
