The New Lawsuit against Spotify
Copyright infringement and royalty issues continue to trouble Swedish digital streaming company Spotify. While its podcasts and videos are substantially safe, its music streaming has been hit with several lawsuits over the years. The latest lawsuit has been failed by Wixen Music Publishing and it demands $1.6 billion in mechanical royalties, damages, injunctive relief and legal costs including fees of the attorneys. The massive lawsuit comes at a time when Spotify is about to carry out its initial public offering. The company is presently valued at around $19 billion. The reevaluation was poised to help a windfall gain for its founders and investors should the initial public offering have gone without any further mishap, technological or legal. The lawsuit threatens not just the IPO but also the modus operandi of the company.
According to the lawsuit, Wixen Music Publishing claims that Spotify has not paid the songwriter royalties around 21% of the time. In other words, one out of every five artists have not received their dues or that one track out of every five songs or compositions that users access is not being duly paid for by the company. This is unsurprising for those who have been familiar with how Spotify began its journey and what types of copyright issues it has had in the past. Wixen Music Publishing represents Rage against the Machine, Tom Petty, Neil Young, Missy Elliott, Beach Boys and Weezer among others.
The fine print is pretty simple. The lawsuit simply states that Spotify has not paid for mechanical licenses that are necessary to distribute or reproduce any music composition. Wixen claims a hundred and fifty thousand as the license fee per song or composition. The issue of mechanical license has come up time and again, especially for streaming services that offer an interactive interface. Radios and other standard broadcasts do not offer any interactivity as there is a lineup of songs or tracks that users listen to. Spotify allows users to select the song they want to hear and hence it is an interactive service. Such a service needs to pay the more conventional royalty, covering performance. It must also pay mechanical royalties because the performance is being replicated or reproduced and distributed.
Spotify does not have the finest record when it comes to lawsuits or even their legal standpoints, according to Santa Cruz Car Accident Attorneys. Often, they have argued in a conflicting manner while moving from one case to another. They have advocated mechanical royalties but have failed to pay them. They have often argued against mechanical royalties. The company is often accused of having its origins in music piracy. It is still believed that the company, as a matter of practice, doesn’t always pay every artist or songwriter and anyone else who should be given due royalties. If popular artists with adequate representation have to take legal action, then unknown or unrepresented artists cannot really expect much.
Spotify had paid over forty three million dollars in mid 2017 that was due to songwriters and publishers. It is not the only settlement Spotify has been compelled to over the years. The company has dealt with class action lawsuits in the past, most notable ones filed by National Music Publishers Association and another filed by a group of independent songwriters.