Executive Overview
As the digital music landscape continues to mature, the economic battlegrounds between multi-trillion-dollar technology conglomerates and the creative community are shifting into sharper, more contentious focus. Next year, the United States Copyright Royalty Board (CRB)—a tribunal of three judges operating under the Library of Congress—will commence formal proceedings to determine the statutory royalty rates and terms that music streaming services must pay to songwriters and music publishers.
This upcoming administrative review, formally known as Phonorecords V, will establish the legal compensation framework for the American market spanning a five-year period from 2028 through 2032. Given the sheer volume of consumption driven by digital platforms, the financial stakes are existential for individual songwriters, major and independent publishing houses, and the streaming giants alike.
Recent filings submitted to the CRB have laid bare the opening postures of all major stakeholders, offering a rare window into the corporate calculations and ideological divides shaping the modern music economy. While most streaming platforms are pushing to preserve the status quo, and music publishers are advocating for moderate increases, one technology titan has shocked the creative sector by proposing a direct regression in creator compensation.
Amazon, a company boasting a market capitalization of $2.8 trillion and annual revenues exceeding $717 billion, has officially wrested the title of industry "enemy number one" from Spotify. By submitting a proposal that demands a reduction in the top-line royalty rate down to 13.4%—coupled with aggressive defense of loophole-ridden bundling schemes—Amazon has ignited a fierce public backlash.
This comprehensive report examines the competing demands submitted to the CRB, explores the mechanics of US copyright law that govern digital mechanical rights, details the friction surrounding subscription bundling, and analyzes what this high-stakes regulatory showdown means for the future of global music creation.
Detailed Chronology and the Phonorecords Framework
To understand the profound significance of the Phonorecords V proceeding, one must examine the complex regulatory architecture governing the exploitation of musical compositions in the United States. Under US copyright law, songwriters and music publishers hold distinct legal protections known as "mechanical rights"—the right to reproduce and distribute a song—alongside separate "performing rights," which cover the public broadcast or transmission of the work.
While performing rights are licensed collectively through performance rights organizations (PROs) such as ASCAP and BMI, mechanical rights for interactive streaming are subject to a compulsory licence under Section 115 of the US Copyright Act. This compulsory licence means that songwriters and publishers cannot legally refuse to let digital service providers (DSPs) stream their works, provided the platforms adhere to the royalty rates and terms established periodically by the CRB. Furthermore, any royalties paid under separate performing rights licenses are ultimately deducted from the total statutory pool owed under the compulsory licence, meaning the CRB’s benchmark rate essentially dictates the absolute ceiling of what a songwriter receives.
The CRB reviews and establishes these compulsory rates every five years through a rigorous quasi-judicial process.
- Phonorecords I, II, and III were characterized by protracted, multi-million-dollar legal wars that ultimately saw incremental, hard-fought gains for songwriters following aggressive pushback from Silicon Valley.
- Phonorecords IV, which set the rates for the 2023–2027 cycle, concluded via a negotiated settlement between publishers and streaming services. It established a gradual, stepped increase in the top-line revenue share rate, culminating in a peak of 15.35% for the final year of the cycle.
Now, as the industry looks past the 2023–2027 parameters, Phonorecords V will establish the economic blueprint for the American streaming market through the turn of the decade. The formal evidentiary hearings and oral arguments for Phonorecords V are scheduled to take place in March and April, though history suggests the parties may attempt to circumvent a grueling trial by negotiating a private settlement sometime beforehand.
Supporting Context & Metrics: The Competing Proposals
The opening submissions submitted to the CRB earlier this month reveal a three-way ideological fracture among streaming platforms, music publishers, and songwriter advocacy organizations. Each faction has put forth radically different visions for how digital wealth should be distributed.
1. The Streaming Platforms: Defending the Status Quo
Led by market leader Spotify, the majority of digital service providers are arguing for the status quo. Spotify’s submission asserts that the revenue share rate of 15.35%—which becomes active next year under the tail end of Phonorecords IV—should be locked in and retained throughout the entire 2028–2032 window.
Spotify argues that the CRB judges are statutorily required to approximate what a "willing buyer" and a "willing seller" would agree to in a private, uncoerced marketplace. According to Spotify’s legal team, "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 relatively swift settlement of Phonorecords IV.
2. The Publishers: Pushing for Growth and Stricter Bundling
Music publishers, represented heavily by trade bodies such as the National Music Publishers’ Association (NMPA), are taking a more aggressive stance. They are arguing that the top-line revenue share rate should scale upward to 20%, accompanied by a robust, guaranteed per-stream minimum floor. Furthermore, publishers are demanding tighter regulatory controls to eliminate the financial leakage caused by multi-product subscription bundling.
3. The Songwriter Coalitions: A Radical Call for Reform
Perhaps the most disruptive filing comes from a united 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 their joint submission, these creator groups argue that the current multi-step revenue-share formula is unnecessarily opaque and heavily favors tech platforms. They have proposed completely abandoning the revenue-share model in favor of a direct, flat pay-per-stream rate. Specifically, their proposal calls for a fixed $0.0030 (0.3 cents) per play for interactive streams. Crucially, this rate would apply uniformly across all service tiers—including free, ad-supported tiers—and would automatically adjust annually for inflation through 2032.
While streaming platforms have historically resisted flat per-play models—particularly on ad-supported tiers where monetization per user is significantly lower—the songwriters’ proposal injects a radical alternative into the regulatory debate.
Official Statements and the "Worst Offender" Crown
While Spotify has long been the primary lightning rod for creator discontent regarding low streaming payouts, the Phonorecords V filings have resulted in a surprising shift in public animosity. Amazon has officially seized the crown of industry "enemy number one."
While other DSPs are seeking to preserve the 15.35% rate, Amazon’s CRB filing stands apart because it explicitly proposes a rate cut down to 13.4% of revenue. This regressive demand stunned industry executives and prompted swift, highly vocal condemnation from publishing leadership.
David Israelite, CEO of the US National Music Publishers’ Association, did not mince words when reacting to Amazon’s maneuver. Taking to Instagram, Israelite publicly bestowed the "worst offender" title upon the e-commerce and cloud computing giant.
"It is the ultimate irony that a company with a market capitalization of $2.8 trillion and annual revenues of $717 billion—making Amazon roughly 100 times the size of the total US publishing and songwriting industry combined—is the single entity demanding to squeeze songwriters the hardest," Israelite wrote.
Israelite also targeted Amazon’s utilization of subscription bundling, accusing the company of "continuing its forced bundling scheme." He noted that Amazon deliberately modeled its bundling practices on Spotify’s controversial playbook—tactics that have collectively cost writers and publishers over one billion dollars in lost revenue over the past couple of years.
The Bundling Controversy Explained
At the heart of the modern streaming friction is the corporate strategy of "bundling." In recent years, major DSPs like Spotify and Amazon have integrated music streaming with adjacent digital products—such as audiobooks, e-readers, and video streaming—into single, consolidated subscription packages.
Under current regulatory interpretations and settlement terms, platforms are permitted to apply heavily discounted royalty allocations to the music component of these bundles, drastically lowering the mechanical royalties paid out to authors and publishers. While streaming executives defend these discounts as foundational compromises agreed upon during Phonorecords IV, creators argue that bundling has been weaponized as an accounting trick to artificially depress songwriter earnings while boosting the parent company’s subscriber acquisition metrics.
Future Outlook: What Lies Ahead for Phonorecords V
As the music industry looks toward the formal CRB proceedings in the spring, the ideological fault lines are deep and unyielding.
On one side, multi-trillion-dollar technology companies argue that existing economic formulas, including flexible bundling rules and stable revenue shares, are essential for maintaining market stability and continued digital expansion. On the other side, a united front of music publishers and impoverished songwriters argue that digital platforms are leveraging statutory monopolies and accounting loopholes to extract billions of dollars in unpaid value from the creative class.
If the past is any prologue, the road to 2028 will be paved with aggressive legal posturing, intensive lobbying, and strategic economic modeling. While a negotiated settlement between the major DSPs and publishers remains a distinct possibility—as parties frequently seek to avoid the immense legal expense and unpredictability of a full CRB trial—the depth of the ideological divide this cycle makes compromise harder than ever.
Should negotiations fail, the three CRB judges will hear comprehensive expert testimony next March and April, ultimately issuing a binding rate determination that will dictate the livelihoods of hundreds of thousands of songwriters well into the next decade. For an industry still grappling with the socio-economic realities of the streaming era, the outcome of Phonorecords V will define the true value of human musical composition in the age of algorithmic consumption.
