The bill creates the Artist Compensation Royalty Fund, to be established and run by a single non‑profit entity designated by the Register of Copyrights with the Librarian of Congress’ approval. It requires covered streaming service providers to collect an additional “living wage royalty” tied to subscription fees and to remit that money (plus a small share of non‑subscription revenue) into the Fund.
The Fund makes quarterly distributions to two buckets: payments to registered featured artists and a separate pool routed to established union distribution funds for non‑featured performers. The statute also gives the Fund Administrator recordkeeping, reporting and audit authorities, and directs service providers to show the surcharge as a line item on billing.
These are operational rules intended to create a dedicated, recurring revenue stream for performing artists from streaming subscriptions.
At a Glance
What It Does
The bill requires subscription streaming services to add a living wage royalty to subscriber bills equal to 50% of the subscription fee, subject to a floor of $4 and a cap of $10, and to remit that fee quarterly to the Artist Compensation Royalty Fund. The Fund also receives 10% of a service provider’s non‑subscription music revenue each quarter. The Fund allocates 90% of receipts to eligible featured artists (paid proportionally by qualifying streams) and 10% to eligible non‑featured artists (distributed through union distribution funds).
Who It Affects
Subscription music streaming services that contract directly with end users and control which streams are available; registered featured performers with measurable streams; session musicians and backup vocalists represented by AFM/SAG‑AFTRA’s distribution mechanism; and subscribers, who bear the explicit surcharge. The Register of Copyrights and the designated non‑profit will have administrative responsibilities.
Why It Matters
This creates a statutory, platform‑collected revenue stream dedicated to performing artists rather than relying on negotiated label or platform payouts; it also introduces new reporting, audit, and compliance obligations for streaming services and centralizes distribution through a federally‑recognized fund and existing union distribution channels.
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What This Bill Actually Does
The bill tasks the Register of Copyrights (with approval from the Librarian) to pick a single eligible non‑profit to create and run the Artist Compensation Royalty Fund. That eligible entity must be set up expressly for this purpose, include artist representation on its board, and demonstrate the technical and administrative ability to receive quarterly remittances and distribute payments.
The Register must publish contact info and a brief explanation in the Federal Register after designation.
Designated streaming platforms must charge an additional fee on top of subscriber bills (the living wage royalty) and report and remit the collected amounts each quarter to the Fund Administrator. The statute requires service providers to show that extra charge as a separate line item on receipts and forbids platforms from treating amounts they collect as part of content revenue calculations.
The Fund Administrator may also require data and perform audits to verify remittances and stream counts.Once deposited, Fund receipts are split into two distribution pools: the larger pool flows to eligible featured artists and is parceled out each quarter according to each registered featured artist’s share of qualifying streams; the smaller pool is sent to AFM/SAG‑AFTRA distribution infrastructure (or successors) for non‑featured performers. The Fund Administrator must retain books and records of receipts and distributions for at least three years and attempt to identify payees; unclaimed payments are held in a segregated trust and, after a Fund‑determined reasonable search period, may be returned to the Fund.
The bill also forbids corporate entities and fully‑generative AI from qualifying as “artists,” and defines key terms such as “service provider,” “stream,” and a monthly cap used to calculate qualifying streams.
The Five Things You Need to Know
The Register of Copyrights, with the Librarian’s approval, must designate the single eligible non‑profit that will establish and administer the Fund and publish a Federal Register notice with contact information within 30 days of designation.
Service providers must remit quarterly: the living wage royalty collected from subscribers and an additional amount equal to 10% of non‑subscription music revenue. Records supporting these remittances must be kept for at least three years.
The Fund allocates receipts into two pools and pays featured artists their share each quarter based on their percentage of qualifying streams accrued in the prior quarter; qualifying streams for a given master recording are capped at 1,000,000 per calendar month when computing shares.
If the Fund Administrator cannot locate an eligible featured artist, the payment is held in a segregated trust; if the artist remains unidentifiable after a reasonable period determined by the Administrator, the money can be deposited back into the Fund. , Service providers must present the living wage royalty as a separate line item on invoices/receipts and may not include collected royalties in any internal calculation of content costs or revenues; the Fund Administrator may promulgate regulations and audit provider books to enforce compliance.
Section-by-Section Breakdown
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Short title
A simple naming provision: the Act is the “Living Wage for Musicians Act of 2025.” This has no operational effect beyond labeling the statute for reference but signals Congress’ intent for how later rules should be interpreted and cited.
Creation and designation of Fund Administrator
This subsection directs the Register, with the Librarian’s approval, to designate an eligible entity to establish and operate the Artist Compensation Royalty Fund. The eligible entity is expected to be a single non‑profit created for the Fund’s administration, with artist representatives on its board and the technological capacity to receive quarterly payments and distribute to artists. The Register must publish a Federal Register notice within 30 days of designation explaining the choice and providing contact information—an administrative transparency step that also creates a public record for service providers and artists.
Quarterly deposits into the Fund
Service providers must remit, on a quarterly basis, the living wage royalty amounts collected from subscribers and 10% of non‑subscription music revenue to the Fund Administrator. The Fund Administrator may also accept deposits from other sources, including government grants. The quarterly schedule synchronizes collection and distribution cycles but raises operational needs for platform billing, reporting systems and reconciliation processes.
Allocation and distribution rules
The Fund divides receipts into a 90% bucket for eligible featured artists and a 10% bucket for eligible non‑featured artists. Featured‑artist payments are allocated each quarter proportional to an artist’s qualifying streams relative to all eligible featured artists’ qualifying streams from the prior quarter; the text uses a definitional cap on qualifying streams per master recording to limit outsized shares. Non‑featured artist payments are routed to specific union distribution funds (AFM and SAG‑AFTRA’s IP distribution mechanism or successors), which must collect payee information to distribute to session musicians and backup performers.
Service provider obligations, billing, and books
Service providers must add the living wage royalty to subscriber bills as an additional fee with clear line‑item disclosure on invoices or receipts. The statute prohibits inclusion of these collected amounts in platforms’ calculations of content costs or revenue—aiming to keep the Fund monies separate from licensing negotiations or internal accounting. Providers must retain books and records for at least three years; the Fund Administrator can require reporting (subscription revenue, non‑subscription revenue, collection details and stream counts) and may audit providers to verify compliance. Those enforcement authorities are left to administrative rulemaking.
Definitions and eligibility limits
Key terms are defined to narrow the Fund’s scope: ‘artist’ is a natural person (excluding corporate entities and fully generative AI), ‘service provider’ is an entity that provides streams to end users and controls availability, and ‘stream’ is an interactive encrypted transmission with limited exceptions for buffering/caching copies. The bill also defines ‘qualifying stream’ with a monthly cap per master recording that affects how payments scale for very high‑streamed works.
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Explore Culture in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Registered featured recording artists with measurable qualifying streams — they receive quarterly payments allocated proportionally to their share of qualifying streams, offering a new, platform‑sourced revenue stream that bypasses label or platform negotiation channels.
- Session musicians, backup vocalists and other non‑featured performers — a dedicated 10% pool is routed to AFM/SAG‑AFTRA distribution infrastructure for payment, creating a higher‑visibility funding mechanism for contributors who typically receive small per‑session fees.
- Artist advocacy organizations and artist representatives on the Fund board — the statute requires board representation and centralized distribution, which strengthens collective governance and creates an institutional channel for artist interests to influence distribution rules.
Who Bears the Cost
- Subscription streaming services that have direct subscriber relationships — they must implement billing changes, collect and remit the surcharge, maintain records for three years, provide data on streams and revenue, and face audits and potential penalties. These are real operational and compliance costs.
- End users/subscribers — the law mandates an explicit surcharge passed to subscribing customers (the living wage royalty) as a line item on statements, so consumers directly pay the statutory levy.
- The designated non‑profit Fund Administrator and the Register — they inherit administrative duties and governance burdens (setting reasonable search periods for unclaimed funds, maintaining trust accounts, rulemaking and audits) that may require staffing and technology not funded by the statute itself.
Key Issues
The Core Tension
The central dilemma is whether to prioritize a steady, statutory surcharge that funds artist compensation (paid directly by subscribers and collected from platforms) or to avoid imposing a market‑distorting levy on consumers and platforms that may reduce subscription demand, incentivize circumvention, or entrench payouts to already‑successful featured artists; the bill solves for financial predictability for artists but risks significant economic and administrative side effects.
The bill creates a predictable revenue flow for artists but leaves significant implementation choices to the Fund Administrator and rulemaking. The decision to route non‑featured payments through existing union distribution funds leverages established payee networks, but it also centralizes power with those organizations and may exclude performers who fall outside their reach or who are not unionized.
The Act mandates data reporting and gives audit authority to the Fund Administrator, but it does not specify the audit standards, penalties, or the administrative budget to carry out large‑scale audits of global platforms—raising questions about enforcement capacity and resource allocation.
The surcharge calculation (50% of a subscription fee subject to a $4 floor and $10 cap) and the 10% carve‑out of non‑subscription revenue create blunt instruments. The floor and cap limit extreme outcomes but can produce widely varying effective burdens across different subscription prices and bundles (family plans, bundled services, promotional pricing).
The qualifying stream cap and the heavy weighting toward featured artists preserve larger payouts for popular acts, but they also perpetuate concentration: the mechanism helps artists with measurable catalog streams more than emerging artists with small but growing audiences. The definitions excluding fully generative AI and corporate 'artists' aim to protect human creators, but enforcement will hinge on metadata, provenance, and possible disputes about authorship and crediting.
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