Publishers seek greatest of four rates; four services want freeze, Amazon a cut

The National Music Publishers’ Association (NMPA) and the Nashville Songwriters Association International (NSAI) want streaming services to pay songwriters and publishers the greatest of 20% of revenue, 40% of what services pay record labels, $2.40 per subscriber a month, or $0.004 per play. Spotify, Apple, Google and Pandora want the 2027 rates, including the 15.35% headline rate, kept in place from 2028 to 2032. Amazon wants the headline rate for non-bundle services cut to 13.4%.

The proposals were filed October 5 in Phonorecords V, the US Copyright Royalty Board (CRB) proceeding that will set mechanical rates for on-demand streaming for five years starting January 1, 2028. Redacted public versions followed October 7, and Music Business Worldwide went through each filing. Labels license recordings through direct negotiation; mechanical royalties are set by the CRB under a compulsory license that applies to any publisher without a direct deal.

Under the Phonorecords IV settlement, accepted by the CRB in December 2022, the headline rate climbs from 15.1% in 2023 to 15.35% in 2027. It is 15.3% this year. The figure is “all-in”: services subtract what they pay for performance rights, and the remainder is the mechanical royalty. For standalone portable subscriptions, services pay the higher of that rate and the lower of 26.2% of what they pay labels (Total Content Costs, or TCC) or $1.10 per subscriber, with the mechanical royalty alone never below 60 cents per subscriber. Bundles carry a 24.5% TCC rate and a floor of 33 cents per active subscriber.

Bundling has been the main fight since the deal. In March 2024, Spotify reclassified its US Premium tiers as bundles that include audiobooks, which lowered the mechanical royalties it pays. Amazon followed with a music-and-audiobook bundle that November. The Mechanical Licensing Collective sued Spotify in 2024; the case was dismissed in January 2025, reopened that March, and is still going. Spotify’s latest quarterly filing puts its liability from March 2024 to June 2026 at about €473 million if the MLC were “entirely successful,” plus potential penalties and interest.

Four services ask for a freeze

Spotify wants the 15.35% rate for the whole period and no other changes. “The best evidence of what willing buyers and willing sellers would agree to is what they actually did agree to, just four years ago: the Phonorecords IV rates and terms,” the company says in its filing. Sara Domeier, Spotify’s Senior Legal Counsel, argues the bundle terms were part of a package, so changing any central term would mean adjusting others.

Apple also asks the CRB to adopt the Phonorecords IV settlement as is. Elena Segal, Apple’s Global Senior Director of Music Publishing, says the deal raised Apple’s TCC rates, per-subscriber minimums and floors by between 16.67% and 37.5% over Phonorecords III. The reduced bundle rate was “absolutely essential” to Apple agreeing, she says, because it let the company add subscribers through Apple One.

SiriusXM’s Pandora proposes the same freeze. Craig McFadden, its Director of Music Licensing, says the Phonorecords IV rates were higher than Pandora had wanted to pay, and that it accepted them partly because larger services were signing and it risked litigating alone. Pandora also asks for limits on late fees, and for anyone engaged in fraud or stream manipulation not to be counted as a user.

Google, which owns YouTube, wants the same rates and no bundle changes, but adds an “Allocation” rule. Google would pay only on the share of plays the license actually covers, with revenue, per-subscriber amounts and minimums scaled down to match. Of the six content categories Google lists on YouTube, it says only “Static-Image Art Tracks,” released recordings played over a single still image, qualify. It also wants app store commissions, carrier-billing charges, other partner fees and certain taxes left out of the revenue base.

Amazon wants lower rates

Amazon proposes a 13.4% headline rate in each year from 2028 to 2032 for every service other than bundles, standalone and free ad-supported alike. It would cut the TCC rate for those services from 26.2% to 22.8%, the per-subscriber figure for standalone portable subscriptions from $1.10 to 96 cents, and the 60-cent minimum to 52 cents.

For bundles, Amazon wants the percentage-of-revenue calculation removed, with a TCC rate of 21.3%, down from 24.5%, and a floor of 29 cents per active subscriber instead of 33. Amazon Music Unlimited, which includes Audible audiobooks, falls into that category.

Amazon calls Phonorecords IV the best benchmark, but says its economist, Leslie Marx of Duke University, adjusted it for “intervening evidence of market power” held by publishers and labels, producing rates about 13% below Phonorecords IV levels. IDAGIO, Qobuz and Beatport submitted testimony supporting the proposal. “Amazon should not have to pay royalties on revenue that it never receives,” the company says.

What the publishers want

The NMPA and NSAI, filing jointly as the Copyright Owners, would adjust the per-subscriber and per-play amounts for inflation each year. The per-play rate would apply to every service type, free tiers included. The $2.40 figure is 20% of a $12 monthly subscription price.

The proposal would replace the current minimums with a cap on performance-royalty deductions, so mechanicals make up at least half of the total royalty pool. It would end the family and student plan discounts, which now count as 1.75 subscribers and half a subscriber, and count each account or sub-account that can play music at the same time as a separate subscriber. Zero-rate free trials and promotions would be eliminated. Bundle components would have to be sold separately at a genuine market price, and no subscriber could be moved into a bundle “where the effect is to reduce royalties.” The publishers also want listening data for each play available to song owners on request.

Greg Prata, Global Chief Financial Officer of Sony Music Publishing, says 15.3% of Spotify’s $12.99 subscription yields about $1.99 a month in total royalties, or roughly $1.00 in mechanicals if performance royalties take half. “A supposed backstop that permits a roughly 40% reduction from the mechanical royalty produced by the percent-of-revenue prong is no backstop,” he says.

Under the CRB’s revised schedule, issued October 2, the parties can file amended written direct statements until December 21 and must respond to each other’s cases by February 1, 2027. A settlement window runs from January 25 to February 15, 2027. Absent a deal, the hearing is set for March 22 to April 15, 2027, with the judges’ initial decision due by December 17, 2027.