Spotify Liable for Millions In Unpaid Royalties?

Indie Music Supporter:

by: Paul Resnikoff

This could be the beginning of a very serious showdown between Spotify, independent labels, publishers, and songwriters, with potentially tens of millions — or more — at stake.  “Victory might be the beginning of something here, [Spotify] might actually owe tens of millions on mechanicals,” one music industry told DMN over the phone last night.

“Guaranteed, Spotify’s lawyers are looking at this very, very carefully.”

Earlier this week, Spotify actively pulled the entire Victory Records catalog following a disagreement over a specific type of songwriter royalty.  Victory, aided by data from royalty-focused startupAudiam, presented data to Spotify alleging under- or non-payment on roughly 53 million song plays, leading to the impasse and total content yank-down.

“After two years I find no evidence that [Spotify has] properly licensed most of the songs that are currently available on the service.”

Now, a very vocal David Lowery — frontman of both Cracker and Camper van Beethoven and a leading artist activist — is accusing the streaming platform of similar subterfuge on 150 different songs.  “I guarantee you that the Victory Records problem is just the tip of the iceberg,” Lowery posted on his site, The Trichordist.

“For the past two years I’ve been trying to figure out how it is that Spotify has legally made available many of the songs that I have published under Camper Van Beethoven Music and Bicycle Spaniard Music. In order to make my songs available on their service in the US, Spotify must enter into a direct license with my companies or an assigned agent.

“OR they must serve an NOI (notice of intent) to take advantage of the statutory compulsory license.”

“After two years I find no evidence that they have properly licensed most of the songs that are currently available on the service. This is the equivalent of a record label releasing an artist’s music without having a contract with the artist (to be fair Apple owned Beats Music may have this same problem as well.)”

Meanwhile, Spotify head of PR Jonathan Prince claims that Spotify simply doesn’t know who to pay, though comments like those could haunt Spotify if this ends up in litigation.  “We want to pay every [fraction of a] penny, but we need to know who to pay,” Prince said.  “The industry needs to come together and develop an approach to publishing rights based on transparency and accountability.”

Meanwhile, Audiam founder Jeff Price is promising to rattle an extremely contentious cage.  Price, co-founder of Tunecore, is now on a warpath to claim and recover royalties from tech giants like YouTube and Apple.

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