Spotify is embroiled in new legal objections over how it pays songwriters royalties… or doesn’t, as the songwriters insist.
At issue is the mechanical copyright royalty – the amount owed to the composer or songwriter from the reproduction of the recording. Songwriters and composers argue that while Spotify negotiated licences with record companies, it didn’t bother asking the writers, and didn’t build the infrastructure internally to pay the writers.
Traditionally this was handed off by the record company to the music publisher. But in the streaming era, things have become messy and opaque. As much as 25 per cent of the royalties owed to composers may be missing, according to National Music Publishers’ Association (NMPA) president David Israelite.
To cut a long and complicated story short, earlier this year Spotify agreed to settle two class action suits as it cleared the decks for its IPO: an IPO songwriters say will make Spotify executives rich, while failing to pay the people whose work built the business – the people who write the songs. Fresh objections on two fronts this week suggest the deal is far from done.