For anyone who has been following Spotify’s legal battles over the past few years, it will come as no surprise that the music streaming giant is once again in hot water over unpaid royalties.
In the wake of going public on the New York stock market, Spotify has found themselves up against a huge US$1.6 billion lawsuit filed by Wixen Music Publishing. Wixen is a Californian music publishing company representing the likes of Stevie Nicks, Neil Young, Tom Petty and Missy Elliot. In filing this suit against Spotify, they are alleging that the streaming service ‘took a shortcut’ in gaining access to their catalogues.
To break down their claim– the US Copyright Act vests rights in both the recording and the composition of a song. Allegedly, Spotify failed to obtain the composition rights in their licensing agreement with Wixen. To reclaim lost royalties, Wixen is claiming $150,000 worth of damages in each of the approximate 10,000 songs featured in this agreement.
According to ABC News, the documents Wixen filed in the United States District Court stated that:
Spotify has build a billion-dollar business on the backs of songwriters and publishers whose music Spotify is using, in many cases without obtaining and paying for the necessary licences.
In response to this claim, Spotify made a US$32 million offer to settle. Wixen rejected this offer and will be proceeding with their action.
For Spotify, this is not their first nor their last lawsuit over royalties. In 2017 alone, we saw the music streaming service pay out US$4.3 million to American publishers and songwriters over licensing misuse. Spotify remains an important company to keep in our periphery vision.
By: Nicola Kahler