Spotify's Publishing Woes Compound, While The Music Biz Plays Nice On Pre-1972 Recordings

Bluewater Music's lawsuit has big implications for Spotify, while several historical adversaries band together in support of a a bill designed to award radio royalties to pre-1972 recordings.
July 21, 2017

Benom Plumb, Assistant Professor of Music Industry Studies at the University of Colorado Denver, reviews the biggest stories of the week affecting music royalties. He is a music industry professional, not an attorney.

Spotify Hit With Two Copyright Infringement Lawsuits from Music Publishers (The Hollywood Reporter)

Songwriters’ spat with Spotify complicates plans to go public (New York Post)

Benom’s Take: I wrote a longer, more details analysis of this lawsuit in a separate blog post, so here’s the summary…

This will be a tough fight for Spotify. Having worked for Bluewater Music as VP of Licensing, I can verify that the company is meticulous and persistent in their licensing and royalty collection work. The company would not file a lawsuit against a behemoth like Spotify unless the copyright infringement and non-payment data they have is rock solid.

Bluewater has been informing Spotify of unlicensed and unpaid compositions streamed on the Spotify platform since 2011 (full disclosure, this was during my time as Vice President of Licensing). Spotify has claimed in the past that it doesn’t know who or how to pay royalties to some songwriters and publishers. This may be true in some cases, but this argument doesn’t make sense with a company like Bluewater. When a reputable publisher makes contact directly to give all the data necessary to license and pay royalties, this is helpful to Spotify and should establish better business dealings in the future between the two companies.

One thing is for sure, Spotify’s fight with music publishers won’t help build investor confidence in that rumored IPO and I definitely don’t see either company backing down. More to come...

Pandora, Sound Exchange, RIAA Join In Support of Pre-1972 Royalty Bill (Hypebot)

Benom’s Take: This is the biggest case of “holding hands and singing Kum-Ba-Yah” in the music industry we’ve seen in decades. Pandora and the record industry agreeing on royalty legislation? Is this real life? Yes, it’s real life and this is very positive news for our industry. Long story short, sound recordings made before 1972 do not currently receive digital and internet radio royalties in the United States. The CLASSICS Act appears to have bi-partisan support (say wha???) and would establish royalty payments for pre-1972 sound recordings. This means all the classics would finally get their proper due and receive digital radio royalties. Let’s do this!

Quincy Jones Earned $18 Million in Royalties Since Michael Jackson’s Death (Billboard)

Benom’s Take: Here’s an update from last week’s story regarding Michael Jackson’s record producer, Quincy Jones. Jones is suing the Jackson estate over an alleged $30 million in royalty underpayments. It appears, according to courtroom testimony by Sony Music’s VP of Royalty Audits, that Mr. Jones was paid nearly $18 Million (mostly in record royalties) between 2009 - 2016. The Sony executive’s testimony implies that Mr. Jones has been paid in plenty and there are no underpayments. Now, $18 Million is definitely a lot of money, but that doesn’t mean Jones couldn’t have been underpaid another $18 (or $30) million. Nevertheless, much of the case seems to rest on certain agreements in question made between Michael Jackson and Quincy Jones. In addition to that, there are still more witnesses to take the stand. Stay tuned, this one is just getting warmed up, too.

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