Spotify Hopes $21 Million Settlement Will Make Musicians Stop Suing

Image courtesy of Scott Beale/Laughing Squid

Spotify is the biggest music streaming service, with a wide selection of artists and types of music. That means it has the widest variety of artists who may become annoyed at its royalty structure, or artists and composers who the service can’t even find. The Sweden-based company settled with one group of publishers, reportedly putting up $21 million to cover unpaid royalties.

That’s reportedly $15 million from the existing pool of royalties set aside for artists that Spotify says that it can’t find, and an additional $6 million added to the pool. It covers the period from the beginning of Spotify until more than a year from now: June 30, 2017.

The settlement is a private agreement, separate from the various lawsuits that musicians have filed against Spotify. Publishers can take part in this settlement or continue with any of the lawsuits, but cannot take part in both.

David Lowery, for example, sued the streaming service over the question of whether it has obtained mechanical licenses from song publishers in addition to licensing the recordings from record labels. His attorney told AFP that the settlement seems like an attempt to settle ongoing royalty disputes outside of the court system, which may not necessarily benefit artists.

“Thousands of songwriters have been harmed by Spotify, and a class action is the best way to protect their songs and their livelihood,” attorney Mona Hanna explained.

Spotify reaches an agreement with publishers over missing royalties [The Verge]
Spotify reaches royalty deal with music publishers [AFP]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.