[The MMA is another example of Big Tech’s lobbying clout.]
The Music Modernization Act (MMA) will forgive Spotify for years of bad behavior. Ahead of its passage, the company is already moving forward with some post-MMA acquisition plans.
Spotify’s ‘non-IPO’ came with a lot of complex puzzles. For example: why is a company that has lost $3 billion — and $1.5 billion in the last year — worth $26.5 billion on Wall Street?
Smart analysts like Peter Kafka pointed to a paid subscriber base of 71 million. That’s something that even mega-media companies like Disney have trouble attaining. Others recognized that Spotify is at the forefront of where music is going, and potentially building a pie that’s big enough for multiple elephants to enjoy (like Apple, Amazon, and Google).
But there’s another big reason: U.S. Congress. The Music Modernization Act is now fast-tracking through the House, and is likely to get passed quickly. It’s a great bill on many fronts, and the decision to consolidate numerous other bills into a ‘mega-bill’ defies gridlock….
Just one problem: music publishers will lose their right to sue Spotify for infringements that occurred in the past.
That’s right: the MMA closes the door to all litigation against Spotify related to unpaid mechanical licenses. We’re talking billions of dollars in damages here, money that publishers will not be able to sue Spotify to recover.
Even more advantageous to Spotify: the cut-off date for lawsuits is actually in the past: January 1st, 2018.
That explains why Wixen Music Publishing launched a lawsuit for $1.6 billion against Spotify — right after Christmas of 2017. Wixen realized that when the MMA passes both chambers and becomes law, their claim to past infringements become null & void.Other publishers couldn’t react quickly enough, if they even realized the fine print before January 1st. But hey: sometimes you gotta play dirty.