Streaming Services Must Add Up to $10 Monthly Fee to Fund New 'Living Wage Royalty' for Musicians

The “Living Wage for Musicians Act of 2025” is a major overhaul of how artists get paid in the streaming era. The core idea is to create a new, mandatory revenue stream dedicated entirely to compensating musical artists, bypassing the current model where platforms largely control the payout structure. This bill establishes the Artist Compensation Royalty Fund, managed by a newly designated Fund Administrator, to collect and distribute these payments. This isn't just about tweaking existing royalty rates; it creates an entirely separate financial ecosystem.

The New Mandatory Fee: What It Means for Your Subscription

If you subscribe to a streaming music service, here’s the part that hits your wallet directly: Service providers must start charging every subscriber an extra fee—the “living wage royalty fee.” This fee is set at 50% of your current subscription cost, but it has a floor of $4 and a ceiling of $10 (Sec. 4(a)). So, if your current plan is $10/month, the new fee is $5. If your plan is $20/month, the new fee is $10. If your plan is $7/month, the new fee is $4. This is a mandatory, separate line item on your bill, and it’s a significant, direct price increase for every single subscriber.

In addition to collecting this new subscriber fee, streaming platforms also have to contribute 10% of their non-subscription revenue every quarter to the Fund (Sec. 2(b)(2)). Platforms like Spotify or Apple Music will face new administrative burdens, including keeping detailed financial records for at least three years, and they are subject to audits by the Fund Administrator to ensure compliance (Sec. 4(d)). If they mess up the paperwork or fail to pay, the Administrator has the power to set rules and impose penalties (Sec. 5).

Who Gets the Money and How It’s Divided

All the money collected from the new fees and platform contributions goes into the Fund and is split into two pots: 90% is earmarked for Eligible Featured Artists (the main acts on a recording) and 10% is set aside for Eligible Non-Featured Artists (like session musicians and backup singers) (Sec. 3(a)).

Featured artists get paid based on their share of qualifying streams. For example, if Taylor Swift’s music accounted for 5% of all featured artist streams last quarter, she would receive 5% of that 90% pot. Interestingly, the bill caps the number of streams counted per featured artist per month at 1,000,000, which suggests an effort to level the playing field slightly by limiting the payout concentration for mega-stars (Sec. 6). The 10% designated for non-featured artists doesn’t go directly to individuals but is sent to two existing organizations—the American Federation of Musicians and Screen Actors Guild, and AFTRA Intellectual Property Rights Distribution Fund—who are then responsible for distributing the money (Sec. 3(b)(3)).

The Real-World Impact: Cost vs. Compensation

For artists, this bill creates a guaranteed, mandatory funding source directly tied to the streaming economy, which is a major win for compensation. It also specifically defines an “artist” to exclude corporate entities and fully generative AI, ensuring the money goes to human creators (Sec. 6).

However, the cost is immediately transferred to the consumer. For the average person juggling bills, a mandatory $4 to $10 increase on a service they already pay for is a significant hit. If you subscribe to multiple services (music, video, etc.), this bill only affects music, but it sets a precedent for how digital content might be funded in the future. The law requires service providers to implement this fee and deposit the money quarterly, starting soon after the Fund Administrator is officially designated by the Register of Copyrights (Sec. 2(b)(2)). This means if the bill becomes law, your next music bill could look very different, very soon.