Apple has filed a proposal with the U.S. Copyright Royalty Board suggesting that songwriters and royalty holders be paid a flat rate for online streams, Billboard reports. Apple suggests a simple, “all-in” statutory rate of 9.1 cents per 100 plays, which the company said is “fair, simple and transparent, unlike the incredibly complicated structure that currently exists.” The move would directly undercut rivals like Spotify and YouTube, who pay songwriters and publishers a percentage of the revenue they generate from streaming.
The current model forces labels and other copyright holders to negotiate their own deals, generally netting between 10.5 percent and 12 percent of a streaming service’s overall revenue, computed using complicated formulas. Apple’s scheme would make it significantly more expensive to run a free service since streaming providers would have to pay the minimum rate even on streams they’re offering for free. Since the free tiers offered by Spotify and YouTube don’t generate much revenue, they get away with paying artists much less under the current system. The three-judge Copyright Royalty Board is still in the early stages of determining the rules for statutory rates paid to songwriters and publishers for downloads, streams and other uses of songs between 2018 to 2022, so the effect of Apple’s filing, if any, won’t be know for some time.