A few months back, Universal Music Group (UMG) and Warner Music Group (WMG), two titans of the recording industry, quietly struck lucrative “direct deals” with Spotify.
The following comes from activist independent singer-songwriter George Johnson.
These agreements boosted the streaming royalty rates paid to their own songwriters and in-house publishing divisions—rates that exceed what all other American songwriters earn.
It’s a coup for these corporate giants, but it exposes a shameful inequity rooted in a century-old federal law: the §115 compulsory license. This relic of the 1909 Copyright Act forces all other songwriters and music publishers to accept a lower, government-set royalty rate—currently a measly $0.00012 per stream—without any chance to negotiate.
That figure isn’t a typo.
At $0.00012 per stream, a songwriter would need over 8,000 streams just to earn $1 dollar. No one can sustain a livelihood on that, yet this is the reality for literally all independent American songwriters and music publishers outside the UMG and WMG empires.
Worse still, this pitiful rate was set in 2022 through the Copyright Royalty Board (CRB), a government tribunal where UMG, WMG, and Spotify—hardly neutral players—helped dictate terms that conveniently kneecapped their competitors.
Now, these exact same companies have sidestepped that system entirely, securing better rates for themselves while leaving everyone else tethered to the CRB’s scraps.
This is a textbook case of market manipulation and regulatory capture dressed up as policy.
UMG and WMG have engineered a two-tier music royalty structure: one tier for their own bottom lines, enriched by private deals, and another for independent creators, shackled by an outdated law.
It’s not just unfair—it’s extremely anti-competitive, tilting the playing field to favor billion-dollar corporations over every individual American songwriter and smaller music publisher.
The hypocrisy is staggering. In one of the last CRB rate proceedings, UMG, WMG, and Spotify dragged it out for seven long years, a slog of litigation that still landed on the same painfully low, below-market rate far from reflecting the true value of the music.
Yet UMG, WMG, and Spotify only needed a few days to hash out their new, higher-rate agreements behind closed doors. If these industry giants can negotiate so swiftly when it suits them, why does the compulsory license—a system that overrides free-market bargaining—still exist?
The answer is clear: it doesn’t serve songwriters; it serves the powerful.
The 1909 compulsory license, and its flawed 2018 successor, the Music Modernization Act (MMA), are now obsolete. They prop up a regime of federal price controls that strip songwriters of their constitutional “exclusive right” to profit from their creative work.
Unlike laborers, songwriters can’t unionize or negotiate collectively—antitrust laws forbid it, classifying their output as “goods and services” rather than labor. The result? A handful of corporations dictate terms, slashing royalties and eroding the economic dignity of an entire profession.
Repealing the compulsory license also wouldn’t unravel copyright protections. The right to a musical composition under §115 would remain intact—a hard-won pillar of intellectual property law.
What would vanish is the government’s compulsory role as a corporate puppet, setting rates that benefit the few at the expense of the many. A free market in music isn’t utopian; it’s long overdue.
For now, immediate action is needed. We urge the CRB judges to equalize the royalty rate, aligning the outdated government standard with the higher rates UMG and WMG have secured.
If they won’t act, Congress must intervene—either by overriding this two-tier travesty or by abolishing the compulsory license and CRB altogether.
American songwriters deserve a level playing field, not a rigged game. The time to dismantle this injustice is now.
George Johnson, an independent singer-songwriter, helped to increase the compulsory government royalty rate in 2022 for vinyl, CDs, and downloads—from 9.1 cents per-song to 12 cents. He also fought for a cost-of-living adjustment for inflation, bringing the rate to 12.7 cents in 2025, a win for all American songwriters and music publishers navigating an ever-shifting industry.
Content shared from www.digitalmusicnews.com.