Stuart Dredge over at Music Ally is reporting Spotify’s losses widened to $600 million last year. Read his article here. I just wanted to point out that some significant portion of these widening losses are due to currency swings. March 29th 2016 Spotify announced a $1 billion US denominated convertible debt deal with […]
According to MusicAlly, Spotify has recently taken dodging songwriters to a whole new level by refusing to pay the Swedish authors’ collecting society Svenska Tonsättares Internationella Musikbyrå or “STIM.” That’s right—Spotify the Swedish company is stiffing the Swedish collecting society STIM for payments to Swedish songwriters (and any other writers STIM collects for). And in a great example of Spotify’s seemingly endless right hand/left hand problem, Spotify is stiffing STIM at the same time as Spotify is launching its high profile charm offensive for superstar songwriters (“Spotify Secret Genius”) and trying to get a federal judge to approve a class action settlement.
For those of you not familiar with this expression, “kicking the dog” is when some does something bad to you, and you in turn do something bad to someone weaker than you.
We call your attention to this odd dispute in Sweden between Spotify and STIM which is the Swedish performing rights organization for songwriters. Spotify has for the second time decided to delay payments to Swedish songwriters because they have “unmatched” tracks. Generally unmatched performing rights royalties get paid to the societies anyway, and then the society sorts out who is to be paid. We are completely puzzled as to why Spotify would take on this extra burden when they are not required to. Performing rights are easy. This is in marked contrast to mechanical royalties in US, in which the burden (by law) falls on the service to sort out unmatched royalties.
While Spotify’s technocrats may be breathing a sigh of relief after the company’s most recent multimillion dollar settlement with songwriters, it is well to remember that the company is probably not anywhere close to out of the woods. As others have learned the hard way, once you replace the rights of songwriters and artists with your own lust for IPO riches, the lawsuits can go on for a very long time indeed. You would think that after nearly 20 years of massive infringement online, the obvious answer would suggest itself to the “get big fast” group: Don’t use music you don’t have rights to use.
Yes, that’s right. Just say no.
The typical reason given by interactive services about why their need to offer unlicensed music exceeds their desire to offer only licensed music is because of competitive pressure from YouTube. Why do they feel this competitive pressure? Because their investors tell them at every board meeting that they should feel it. But let’s be clear–I doubt that Tim Cook gets Eddie Cue in a headlock over the issue over at the Infinite Loop. If you agree, then that kind of narrows it down.
But entertain that idea for a moment, however ill founded. Why is YouTube able to sustain this competitive position that supposedly makes otherwise licensed services soil themselves with fear of being undercut and overrun by YouTube?
That’s right–the “DMCA license”, or YouTube’s absurd use of the “safe harbors” granted to them under the U.S. Copyright Act which YouTube likes to think makes them bullet proof. (Which is also what Cox Communications thought until they weren’t and is probably what Facebook thinks, too.)
So get that straight–some would say that The Golden Child (aka Spotify) is to be allowed to limp their way to the increasingly inexplicable goal of some kind of big financial reward (or “exit”) in an IPO of whatever stripe while we are all asked to look the other way and allow them the same shite arrangements that YouTube enforces through lobbying, litigation and unprecedented monopoly position (aka crony capitalism).
And you thought it was all about the “Value Gap”? Apparently not.
Last year when Spotify took on $1 billion in debt, we reported that it did so under terms that forced rate increases if it failed to IPO. Now, those terms could force Spotify to IPO quickly, which leaves the music industry in a strong negotiating position.
They still haven’t paid songwriters…
The traditional music business is in danger of being hit by a ‘brain drain’ as streaming services raid top executive talent.
The latest high-profile figure to cross the divide is former Def Jam and Warner boss Lyor Cohen, whose appointment at YouTube has set industry tongues wagging worldwide.
He’s not the only one: we hear Troy Carter at Spotify has just swooped for his former Atom Factory management colleague Sam Berger.
The smart money is on at least one of these vacancies being filled by a senior figure from a record company. Any guesses?
When you scan back over the past few years, a very definite pattern becomes clear: a long line of senior label execs have been poached by the likes of Spotify, Apple Musicand YouTube – and it’s a trend which is increasing in intensity.
Here, MBW presents a extensive run-down of who’s gone where.
It’s a list which poses two key questions:
(i) How worse off is the ‘traditional’ music rights business due to the loss of this executive talent to ‘the other side’?; and (ii) Who’ll be next…?
Another insightful post by the author of Free Ride! We’re looking forward to Mr. Levine turning his attention to the racketeering at Facebook.
As Spotify begins to prepare for an IPO, which sources say the company is planning for late 2017, the relationship between the Swedish streaming giant and its trifecta of major-label frenemies (Universal Music Group, Sony Music Entertainment and Warner Music Group) is going through some drama.
Finding compromise is more important than ever for both sides. Spotify needs the majors’ vast catalogs and without long-term deals in place, it would be hard for the company to go public — which it essentially has to do in order to satisfy the terms of a financing deal.