Back in March their were headlines about the US Copyright Royalty Board deciding that mechanical streaming payouts from the likes of Spotify would rise by 44% or more between 2018 and 2022.

Spotify, alongside other music streaming operators like SiriusXM/Pandora, Google and Amazon appealed the mandated pay rises for songwriters and publishers in the US.

And to add on to that, it turns out that there was some additional and under-reported complexity to the CRB decision concerning Spotify’s student discount offers and its family plan bundles – which allows six family members to stream Premium Spotify for $14.99 a month.

Because of this issue, Spotify has now calculated that many music publishers actually owe them money for 2018, due to an overpayment based on the prior rates and now they’re asking for their money back.

A senior figure in the music publishing industry stated, “Spotify is clawing back millions of dollars from publishers in the US based on the new CRB rates that favor the DSPs, while appealing the CRB decision. This puts some music publishers in a negative position. It’s unbelievable.”

Spotify plans to treat this negative balance as an advance given out by the company, which will be recouped from its 2019 royalty payouts to publishers and songwriters.

The spokesperson for Spotify also mention that, “According to the new CRB regulations, we overpaid most publishers in 2018. While the appeal of the CRB decision is pending, the rates set by the CRB are current law, and we will abide by them –  not only for 2018, but also for future years in which the amount paid to publishers is set to increase significantly.”

He continued, “Rather than collect the 2018 overpayment immediately, we have offered to extend the recoupment period through the end of 2019 in order to minimize the impact of the adjustment on publishing companies.”

David Israelite, the CEO of the National Music Publishers Association who decried Spotify’s CRB appeal, responded to Spotify’s request for reimbursement from the publishers by saying, “I find it so hypocritical for a digital service that is appealing the CRB decision to then take advantage of the parts of that decision that benefit it. I guess we shouldn’t be surprised.”

According to MBW, The CRB rules that the annual streaming royalty rate in the States between 2018 and 2022 will be determined by the highest outcome across one of three different models: 1) a percentage of a streaming company’s total revenue; 2) a percentage of what that streaming service pays to record labels each year; 3) a flat fee per subscriber in the US.

The new CRB-approved regulations for streaming payouts also states that, “A Family Plan shall be treated as 1.5 subscribers per month, prorated in the case of a Family Plan Subscription in effect for only part of a calendar month. A Student Plan shall be treated as 0.50 subscribers per month, prorated in the case of a Student Plan End User who subscribed for only part of a calendar month.”