The Music Publishers Are Beside Themselves Over Spotify’s Lyrics And Videos
If you thought music publishers couldn’t get any angrier at Spotify, well, you weren’t paying attention. The National Music Publisher’s Association (NMPA) has just sent a cease and desist letter to the streaming giant alleging that the company is violating copyright by allowing lyrics, videos, and altered songs on the platform. This comes after the company recently claimed that it would probably spend about $150 million less in songwriting royalties this year due to moving more customers over to bundles, which have a lower royalty payout.
The NMPA claims that songwriters currently get no extra revenue from having their lyrics on the platform, although in some cases there are separate agreements with some publishers and with third party aggregators like MusixMatch. These deals are usually only 1 or 2 years long and don’t tend to bring in a lot of revenue for either the publisher or Spotify.
Then There Are Videos
Which brings us to videos, and the NMPA claims that they require a whole different sync license. Once again, these are based on direct deals between Spotify and each publisher, so some are in place while others are not.
But the one that really sets the publishers off is its remix feature that lets users speed up or slow down a song. The publishers claim that this creates a derivative work, and you guessed it, Spotify hasn’t paid for it.
Spotify Doesn’t Think So
Spotify appears to be brushing these claims off, saying that ““This letter is a press stunt filled with false and misleading claims. It’s an attempt to deflect from the Phono IV deal that the NMPA agreed to and celebrated back in 2022. We paid a record amount to benefit songwriters in 2023, and we are on track to exceed this amount in 2024. Spotify is a platform for licensed content. We are committed to the integrity of our platform, and we have a clear process in place for rights holders to contact Spotify about any content they believe is unlicensed.”
Songwriters have always gotten the wrong end of the stick when it comes to streaming royalties, making about a quarter of what an artist makes per song. While most publishers stew over the fact they don’t make as much, Spotify’s latest strategy of moving more of its customers over to bundled services (Spotify comes with your phone service, for instance) where the royalty payout is less has really rankled the industry.
The fact of the matter is that Spotify is finally profitable, much to the relief of its investors and Wall Street. The company reports a gross profit of just over a billion dollars for the first quarter of 2024. When the company was still in the red, it was hard for record labels and publishers to squeeze more royalty money from the company. Now that it’s in the black, it’s open season for the legal departments throughout the music industry to put the squeeze on.
