The popular streaming service was sued for $150m by a group of artists who claim that Spotify has reproduced and distributed their copyrighted works without permission.
The lawsuit was filed at California’s central district court a couple days ago by the law firm Michelman & Robinson LLP on behalf of David Lowery, frontman of Camper Van Beethoven and Cracker. According to the lawsuit, four of his songs were made available to the 75 million users of the streaming service, without notification to the rights holders or royalties paid.
According to reports, the company has reserved $25 million to settle royalty disputes. In the meantime, the lawsuit brought by the musician is considered as a class action. In other words, other artists can join the suit if they find themselves in a similar situation. In response, Spotify’s global head of comms and public policy claimed that the service had always been committed to paying songwriters and publishers all the royalties, but added that unfortunately, particularly in the US, the information necessary to identify the appropriate copyright owners may appear missing, wrong, or incomplete. In such cases when music copyright owners are not immediately clear, Spotify sets aside the royalties it owes until it manages to confirm their identities.
Spotify also said that it is cooperating with the National Music Publishers Association in order to find the best way to pay out the royalties the company has set aside. Moreover, the streaming service informed that it was investing in the resources and technical expertise to create a comprehensive publishing administration system that would be able to solve this problem for good.
The industry experts also point out that the royalties paid by streaming services including Spotify has come under intense scrutiny from musicians who claim that the payments are too low. Spotify replies that 75% of its users don’t pay it a penny enjoying music for free, and most of the revenue it gets from the rest 25% goes to artists. For example, Mariah Carey’s seasonal apparition All I Want for Christmas Is You was listened more than 9 million times before Christmas and brought her $66,000 in royalties.
By the way, Spotify has just announced a deal to bring the Beatles to the service.