Executive Overview
The battlelines have officially been drawn for the next monumental conflict over the economics of digital music. As the United States Copyright Royalty Board (CRB) prepares to determine the mechanical royalty rates streaming services must pay to songwriters and music publishers for the 2028–2032 period—a landmark regulatory proceeding known as Phonorecords V—industry stakeholders have submitted their opening legal and financial demands.
What has emerged from these initial filings is not merely a routine dispute over percentage points, but a fierce ideological struggle over the valuation of musical composition in the streaming age. While the majority of digital service providers (DSPs) are pushing to maintain the status quo, one tech monolith has dramatically upended the negotiations. Amazon has officially seized the dubious crown of "worst offender" in the eyes of the American songwriting community, outstripping even Spotify in its aggressive push to lower songwriter payouts.
Simultaneously, music publishers are fighting for higher revenue shares and tighter restrictions on contentious bundling practices, while a coalition of prominent songwriter groups is calling for the complete demolition of the existing revenue-share model in favor of a flat, inflation-adjusted per-stream rate. With billions of dollars hanging in the balance, the upcoming CRB hearings threaten to expose the deep financial friction between Big Tech platforms and the creative class whose works form the foundation of their multi-billion-dollar empires.
Detailed Chronology and the Mechanics of the CRB
To understand the weight of the Phonorecords V proceedings, one must first comprehend the unique and complex legal framework governing musical works in the United States. Under US copyright law, mechanical rights—the rights to reproduce and distribute musical compositions via digital streams—are subject to a compulsory license. This statutory mechanism means that songwriters and music publishers cannot legally withhold their songs from a digital streaming service, provided the platform complies with statutory terms. Instead of engaging in open-market negotiations for every track, DSPs pay rates that are historically and periodically adjudicated by the CRB.
The regulatory timeline operates in rigid five-year blocks:
- Phonorecords III: Set the contentious rates for 2018–2022, which sparked multi-year legal battles between publishers and streaming giants like Spotify, Apple, Google, and Amazon.
- Phonorecords IV: Governed the period from 2023 to 2027, culminating in a negotiated settlement that established incremental annual increases, ultimately culminating in a top-line revenue-share rate of 15.35% that will take effect next year.
- Phonorecords V: The current review cycle now underway, which will dictate statutory rates and rules for the American market from 2028 through 2032.
Compounding this complexity is the dual-licensing nature of music in the US. While mechanical rights are managed via the CRB’s compulsory framework, public performance rights—the rights associated with broadcasting or streaming a composition to the public—are handled separately. These performance rights require direct licensing agreements with Performing Rights Organizations (PROs) such as BMI and ASCAP. However, American copyright law mandates that royalties paid through PRO performance licenses are ultimately offset and deducted from the total statutory payouts required under the mechanical license. Consequently, the CRB rate effectively acts as the total ceiling for what a songwriter and publisher can expect to earn from a US stream.
The CRB judges are statutorily instructed to determine these rates by simulating what a "willing buyer" and a "willing seller" would agree to in a free, private market. This hypothetical benchmark mirrors how master recording rights—controlled directly by record labels and major distributors—are negotiated outside of government oversight.
As the calendar turns toward the formal CRB evidentiary hearings scheduled for March and April, the positions staked out by the opposing factions reveal a widening chasm between the tech platforms that host the music and the creators who write it.
Supporting Context & Metrics: The Positions of the Major Players
The opening submissions to the CRB reveal three distinct strategic visions for the 2028–2032 window:
1. The Streaming Platforms: Defending the Status Quo (and Seeking Cuts)
Most major streaming providers are advocating for the preservation of the current financial architecture. Spotify, for instance, has argued in its filing that the best indicator of a fair market rate is the settlement reached just four years ago during Phonorecords IV. Pointing to the relatively swift compromise that established the upcoming 15.35% revenue share for 2025–2027, Spotify maintains that these terms should simply be rolled over through 2032.
However, Amazon has broken ranks in the most aggressive fashion possible. Rather than proposing a rollover or a modest adjustment, Amazon’s submission formally requests a rate cut, dropping the top-line revenue share down to 13.4%. For an industry accustomed to fighting tooth and nail for incremental gains, a downward revision of this magnitude from one of the world’s most valuable corporations has sent shockwaves through the publishing community.
2. Music Publishers: Chasing 20% and Closing Loopholes
Represented primarily through trade bodies like the National Music Publishers’ Association (NMPA), music publishers are pushing for an aggressive upward revision. Their core proposal asks the CRB to elevate the top-line revenue share to 20%, coupled with an enforceable per-stream minimum to protect creators against depressed payouts in low-yielding tiers. Furthermore, publishers are lobbying to eliminate or drastically restrict the "bundling discounts" that have cost the industry over a billion dollars in recent years.
3. Songwriter Coalitions: Proposing a Radical Overhaul
Perhaps the most disruptive filing came not from a corporate entity, but from a unified coalition of creator advocacy groups, including the Songwriters Guild of America, the Society of Composers & Lyricists, Music Creators North America, and the Music Artists Coalition.
In a bold challenge to the status quo, these organizations have proposed completely dismantling the multi-step, revenue-share formula that has governed the industry for decades. Instead, they are advocating for a direct, flat pay-per-stream model:
- The Core Proposal: A fixed $0.0030 per play for interactive streams.
- Universal Application: This rate would apply uniformly across all service tiers—including free, ad-supported tiers which traditionally yield significantly lower payouts per user.
- Inflation Protection: The per-play rate would feature mandatory annual adjustments to match inflation through 2032.
While streaming services are expected to vigorously resist flat per-play models—particularly on ad-supported tiers where per-user revenue is fractional—the coalition’s proposal underscores a profound, grassroots disillusionment with complex revenue-share calculations that creators often find opaque and unfavorable.
Official Statements and Industry Reactions
The designation of Amazon as the industry’s "enemy number one" was cemented publicly by David Israelite, CEO of the National Music Publishers Association, in a blistering statement shared across social media.
Highlighting the staggering disparity in scale, Israelite pointed out that Amazon boasts a market capitalization of $2.8 trillion and annual revenues touching $717 billion. To put those figures into perspective, Amazon’s corporate footprint is roughly 100 times the size of the entire US publishing and songwriting industry combined.
"It is the ultimate irony that a company with unlimited resources, a multi-trillion-dollar valuation, and revenues that dwarf our entire creative sector is the exact entity that wants to squeeze songwriters the most," Israelite declared, taking direct aim at Amazon’s formal request to slash the mechanical royalty rate to 13.4%.
Israelite also leveled heavy criticism at Amazon’s utilization of bundling strategies. Over the past two years, Spotify faced intense public backlash from creators for bundling its music streaming service with audiobooks, a tactic that allowed the platform to reallocate subscription revenue away from music and consequently lower its statutory royalty obligations. According to publishing executives, Amazon quickly adopted a similar playbook, implementing "forced bundling schemes" that have drained more than a billion dollars from the pockets of songwriters and publishers.
Spotify, for its part, defended its reliance on bundling provisions, arguing that these structural terms were a foundational, bargained-for element of the Phonorecords IV settlement. In its legal submission, Spotify emphasized:
"The bundle terms and economics in particular were a known, core term of the Phonorecords IV settlement… In publicly celebrating the settlement, both sides recognized the bundle terms and economics as a central component of the deal."
Despite Spotify’s insistence that bundling was mutually understood and accepted, publishers maintain that the practice has been aggressively weaponized to erode creator compensation, a tension that is guaranteed to take center stage during the upcoming regulatory hearings.
Future Outlook: What Lies Ahead for Phonorecords V
As the music industry looks toward the horizon, the path to Phonorecords V is fraught with high-stakes legal maneuvering. The CRB judges are scheduled to formally review, weigh, and adjudicate all submitted proposals during evidentiary hearings slated for March and April.
However, litigation before the CRB is notoriously protracted, expensive, and adversarial. Both DSPs and music publishers are acutely aware that a litigated outcome carries inherent unpredictability. Consequently, a strong incentive remains for both sides to negotiate a private settlement before the hearings commence, mirroring the swift compromises that ended previous rate cycles.
Yet, the distance between Amazon’s demand for a 13.4% rate cut, Spotify’s insistence on a flat 15.35% rollover, and the publishers’ aggressive push for a 20% floor—not to mention the songwriter coalition’s radical call for a flat $0.0030 per-play model—makes an amicable, early settlement harder to envision than in previous years.
If negotiations fail and the matter proceeds to a full CRB trial, the proceedings will serve as an intense public referendum on the economic viability of songwriting in the modern digital ecosystem. As tech conglomerates continue to leverage their immense market power to optimize profit margins, the American creative class has made it unequivocally clear: they will no longer absorb the cost of corporate cost-cutting without a ferocious fight.
