Executive Overview
As the music industry looks ahead to the next decade, a silent yet monumental financial war is brewing in Washington, D.C. Next year, the United States Copyright Royalty Board (CRB) will officially commence proceedings to determine the statutory royalty rates that streaming services must pay to songwriters and music publishers for the American market spanning the years 2028 through 2032.
Referred to as the "Phonorecords V" rate proceeding, this quinquennial regulatory battle dictates the economic livelihood of thousands of American creators. The opening volleys have now been fired. Earlier this month, streaming giants, music publishers, and songwriter advocacy coalitions submitted their preliminary demands to the CRB, laying bare a staggering ideological and financial chasm between the platforms that distribute music and the creators who breathe life into them.
While most streaming platforms are adopting a defensive posture—lobbying to preserve the status quo—one titan has shocked the industry by proposing a dramatic, downward revision of the royalty rate. Amazon has officially supplanted Spotify as the music community’s "enemy number one," drawing fierce condemnation from publishing executives for attempting to squeeze creators while pulling in historic corporate revenues. Meanwhile, songwriter coalitions are pushing for a radical systemic overhaul, calling for the complete abandonment of the current revenue-share model in favor of a fixed, inflation-adjusted per-stream payout.
As the CRB prepares to hear oral arguments and testimony in the spring of 2026—with rates ultimately dictating payments through 2032—the stage is set for a high-stakes collision between trillion-dollar technology conglomerates and the global songwriting community.
Detailed Chronology and the Mechanics of the CRB
To understand the gravity of the Phonorecords V proceeding, one must first understand the complex legal and historical framework governing musical composition royalties in the United States.
Unlike sound recordings—the master tracks owned or controlled by record labels and distributors, which are negotiated via private, open-market transactions—musical compositions (the underlying songs, lyrics, and melodies) are subject to rigid statutory oversight. Under US copyright law, digital music providers can take advantage of a compulsory license to exploit "mechanical rights." This means that streaming services are legally permitted to stream any song on demand, provided they pay statutory rates set by the CRB.
Streaming platforms also exploit separate "public performance rights." These are not covered by the compulsory license, requiring services to secure separate licenses from performing rights organizations (PROs) like BMI and ASCAP. However, under standard regulatory offsets, the royalties paid under PRO licenses are deducted from what is owed under the compulsory mechanical license. Consequently, the rate set by the CRB functions essentially as the total, combined rate that a songwriter and publisher receive for an interactive stream.
The CRB reviews and establishes these statutory rates every five years through a structured administrative process:
- Phonorecords III (2018–2022): Marked a contentious battle where publishers fought for, and eventually secured, historical incremental increases in the top-line revenue share, though prolonged legal appeals delayed implementation.
- Phonorecords IV (2023–2027): Concluded via a relatively swift settlement between streaming services and music publishers. It established a series of small, incremental annual increases to the top-line rate, culminating in a peak of 15.35% in 2025, which will carry through 2027.
- Phonorecords V (2028–2032): The upcoming proceeding, for which preliminary proposals were filed this month, and which will be formally deliberated by CRB judges during public hearings in the spring of 2026.
When deciding rates, CRB judges are statutorily mandated to determine what rates a "willing buyer" and a "willing seller" would agree to in a hypothetical open-market private negotiation. Spotify’s legal defense for the upcoming cycle relies heavily on this principle, arguing in its filing that "the best evidence of what willing buyers and willing sellers would agree to is what they actually did agree to, just four years ago" during the amicable Phonorecords IV settlement.
Conversely, music publishers have long argued that the very existence of the compulsory license places them at an inherent disadvantage. While streaming services can technically attempt to negotiate direct deals with publishers, they do so with the safety net of the compulsory license to fall back on if negotiations fail, severely skewing market leverage.
Supporting Context, Metrics, and the Amazon Controversy
When the preliminary filings were unsealed, industry watchers eagerly anticipated which streaming service would attract the wrath of the creative community. While Spotify has historically shouldered the brunt of songwriter animosity—particularly over its aggressive corporate maneuvers and profit margins—the crown for "worst offender" has officially been seized by Amazon.
The Race to the Bottom: Amazon’s Rate Cut Proposal
While the majority of streaming services are petitioning the CRB to maintain the status quo—preserving the 15.35% revenue share rate taking effect next year through the end of 2032—Amazon’s submission stands out for an entirely different reason. Amazon is actively proposing a rate cut down to 13.4% of revenue.
This proposal stunned industry executives. David Israelite, President and CEO of the National Music Publishers’ Association (NMPA), wasted no time publicly bestowing the "worst offender" title upon Amazon via a blistering statement on Instagram. Israelite highlighted the striking irony of a corporate leviathan with a market capitalization of $2.8 trillion and annual revenues of $717 billion—making Amazon roughly 100 times the size of the entire US publishing and songwriting industry combined—attempting to squeeze the lowest-earning participants in the music ecosystem.
The Bundling Epidemic
Beyond the top-line revenue rate, the most explosive issue in the Phonorecords V review centers on "bundling discounts." Under current rules, streaming platforms can utilize statutory discounts when they bundle music subscriptions with other consumer offerings, such as audiobooks, e-readers, or video streaming services. These discounts substantially reduce the per-subscriber royalty payments funneled to songwriters and publishers.
Over the past two years, Spotify’s implementation of bundling discounts has drawn relentless criticism from creators. However, Amazon has quietly utilized similar mechanisms to trim its payouts to the music industry. With Amazon now holding the crown as the primary antagonist of the CRB review, public scrutiny over its bundling strategies has intensified.
Israelite explicitly linked Amazon’s actions in his social media critique, castigating the tech giant for pursuing a rate cut while "continuing its forced bundling scheme." He noted that Amazon directly modeled its packaging tricks on Spotify’s playbook—tactics that have collectively cost songwriters and publishers "more than a billion dollars" in unrealized revenue.
Official Statements and Stakeholder Positions
The divergence in strategy among the three primary factions—streamers, publishers, and songwriter advocacy groups—highlights a fractured ecosystem heading into the 2026 CRB hearings.
1. The Streaming Services: Defending the Status Quo and Flexibility
Spotify and other major platforms are pushing firmly for the retention of current terms, emphasizing that predictability and flexibility are essential for market stability. Spotify’s CRB filing stresses that the complex web of bundling rules agreed upon during Phonorecords IV was not an incidental byproduct, but rather the cornerstone of a negotiated compromise.
"The bundle terms and economics in particular were a known, core term of the Phonorecords IV settlement," Spotify writes in its submission. "In publicly celebrating the settlement, both sides recognized the bundle terms and economics as a central component of the deal."
Streamers argue that penalizing them for utilizing these pre-approved bundling frameworks undermines the validity of regulatory settlements and destabilizes the digital audio marketplace. Furthermore, platforms argue that any increase in statutory mechanical rates threatens their operational margins, particularly as they diversify into multi-media subscription bundles.
2. Music Publishers: Demanding Higher Floors and Stricter Caps
Music publishers are taking an aggressive stance against the status quo, arguing that 15.35% is entirely insufficient in an inflationary economic environment. Publishers are officially petitioning the CRB to:
- Elevate the top-line revenue share rate to 20%.
- Implement an additional, mandatory per-stream minimum floor.
- Enforce much stricter limitations and higher minimum floors on bundling discounts to prevent platforms from artificially diluting songwriter payouts.
Publishers point out that beneath the top-line revenue share, complex statutory rules govern how song royalties interact with sound recording payouts, alongside a baseline guarantee ensuring payments cannot fall below $1.10 per premium subscriber per month. Publishers want these minimums universally scaled upward.
3. Songwriter Coalitions: A Call for Radical Overhaul
Perhaps the most disruptive filing comes not from corporate publishers, but from a unified coalition of songwriter and artist advocacy groups, including the Songwriters Guild of America (SGA), the Society of Composers & Lyricists (SCL), Music Creators North America (MCNA), and the Music Artists Coalition (MAC).
In a joint statement accompanying their submission, the coalition declared that the "heart" of their proposal is a total abandonment of the multi-step, revenue-share formula. Instead, they are advocating for a direct, flat pay-per-stream model.
Their headline proposal asks the CRB to mandate:
- A fixed $0.0030 (three-tenths of a cent) per play for interactive streams.
- Universal application across all service tiers—including free, ad-supported tiers which traditionally yield much lower per-user revenue.
- Automatic annual adjustments for inflation running through December 31, 2032.
Streaming platforms have historically expressed deep hostility toward flat per-play models, particularly for ad-supported tiers. Because free tiers generate significantly lower advertising revenue per user, a fixed per-play minimum dramatically increases the financial risk for platforms, shifting the burden of monetization entirely onto the service providers.
Future Outlook: What Lies Ahead for Phonorecords V
As the preliminary legal salvos conclude, the battle lines for Phonorecords V are firmly drawn. The proceeding represents a existential crossroads for the American music economy.
If streaming giants like Amazon succeed in pushing rates downward, or if Spotify successfully defends its bundling discounts, professional songwriters face a future where their income fails to scale alongside the explosive global growth of streaming consumption. Conversely, if music publishers and songwriter coalitions achieve their ambitious goals—securing a 20% revenue share, dismantling bundling loopholes, or forcing a revolutionary $0.0030 per-play minimum—it would trigger a massive wealth transfer from Silicon Valley tech monoliths to the creative class.
The immediate next steps will take place in the administrative courts of Washington, D.C. The Copyright Royalty Board is scheduled to formally consider all opening proposals, expert testimonies, and economic data during extensive hearings slated for March and April of 2026.
While there remains a narrow window for the streaming services and the music industry to reach a private, out-of-court settlement prior to the hearings—much like they did during the Phonorecords IV cycle—the widening ideological chasm between Amazon’s proposed rate cuts and the songwriters’ demands for a flat-fee model makes a voluntary compromise appear increasingly unlikely. Until then, songwriters, publishers, and tech executives alike are bracing for what promises to be one of the most contentious copyright battles of the decade.
