All of the Problems with the Spotify/NMPA Settlement
FutureBlog 2016-06-04
Summary:
In December of 2015, musician and songwriter David Lowery filed a class action lawsuit against Spotify over unpaid mechanical royalties.
Though mechanical royalties are covered by a compulsory license, Lowery argues that Spotify did not live up to the terms of that license, failing both to inform him of the use of his music or to pay the government-set royalty required by federal statue. For its part, Spotify claims that it never intentionally played music without compensating songwriters and publishers, but was sometimes unable to determine what parties to pay.
Three months later, Spotify announced that it had reached a “landmark” deal with the National Music Publishers Association (NMPA)—the trade industry group representing the interests of many publishers—would see the service paying $30 million dollars in unpaid royalties and damges. The two sides then wasted no time contacting songwriters and publishers to ask that they sign on to the deal.
However, this agreement has turned out to be anything but a slam dunk for the two sides, with its terms generating immediate criticism from a number of songwriters and independent publishers. Some of the strongest pushback came from Lowery himself, who when presented with the opportunity to settle, balked at the offer on his blog.
Nevertheless, songwriters and publishers have to decide whether or not to join this settlement (and waive their rights to join the other class action lawsuits against Spotify). Unfortunately, the concerns over the settlement are very serious and worth pondering before signing your name on the dotted line (or Survey Monkey form).
As such, here are the key concerns that are raised by the settlement and what they mean to those considering signing on.