New lawsuit demands $150M from Spotify for failing to pay license holders

Posted:
in General Discussion
In an escalation of the battle over streaming royalties, a new class action lawsuit is asking for at least $150 million in damages from Spotify for allegedly streaming songs without proper licensing.




The suit was filed through the Central District Court of California by David Lowery, best known for heading the bands Cracker and Camper van Beethoven, Billboard said. Spotify is accused of failing to identify or locate the owners of the music to pay them, as well as not issuing a notice of intent to employ a compulsory license.

The case moreover claims that Spotify has publicly admitted to not obtaining licenses, having created a reserve fund worth millions of dollars for handling absent royalty payments.

Part of the $150 million sought stems from potential penalties ranging from $750 to $30,000 for each infringed work, and as much as $150,000 per song used in willful infringement.

Should Lowery's side win the case Spotify may not only have to pay penalties and legal fees, but stop streaming the songs in question until licensing is secured. Some songs mentioned include titles like "King of Bakersfield" and "Tonight I Cross the Border," which have already been removed from play.

Many musicians have complained that streaming services like Spotify, Pandora, and Apple Music don't pay well enough to sustain a career, which is a growing problem as the industry shifts away from a download model. Even Taylor Swift, one of the world's richest artists, threatened to boycott Apple Music until the company agreed to pay royalties for streams by trial listeners. Pandora and others were recently forced to offer better payments after a Copyright Royalty Board ruling.

Comments

  • Reply 1 of 14
    msanttimsantti Posts: 1,377member
    This whole streaming thing may just crash and burn.

    i can't remember the last time I bought a song if iTunes or a CD fir that matter.
  • Reply 2 of 14
    As Apple moves some of its iPhone customers to a quasi annual subscription service for new iPhone hardware, it may become easier to position services like Apple Music as add-on services... potentially at an initial discount to get people hooked.  E.g., "Pay $30/month for your iPhone, and we'll throw in Apple Music at a discounted price of $5/month." (The "$30" is fictitious, just for illistration's sake.)
    lostkiwi
  • Reply 3 of 14
    "don't pay well enough to sustain a career"
    Well, it's better than nothing, because I wouldn't buy a CD or download ever again.  (manage downloaded content is too time consuming.)
    So consider money which you get from my subscription as additional earnings to CD sales.
    If no streaming - you won't get anything instead. At least from me.
  • Reply 4 of 14
    On the surface anyway, this suggests multiple class-actions could be filed against Spotify and they could subsequently disappear faster than a streaming bullet!
  • Reply 5 of 14
    foggyhillfoggyhill Posts: 4,767member
    Spotify is in a hell of trouble it seems.
    The Apple assault will just really compound this year as Apple Music gets better and more deeply integrated into the ecosystem.
    cornchip
  • Reply 6 of 14
    Right. License holders, not artists. How much of that will end up going to artists? A whopping ZERO percent. 
    cornchip
  • Reply 7 of 14
    radarthekatradarthekat Posts: 3,396moderator
    urahara said:
    "don't pay well enough to sustain a career"
    Well, it's better than nothing, because I wouldn't buy a CD or download ever again.  (manage downloaded content is too time consuming.)
    So consider money which you get from my subscription as additional earnings to CD sales.
    If no streaming - you won't get anything instead. At least from me.
    Baseball players and musicians.  What do they have in common?  Most are sufficiently passionate about what they do that they'd do it for free, with 100 more waiting behind them to take their place.  And both want to be paid mega bucks.  Do they not see the contradiction?  Supply and demand, eventually, dictates the price.  They have nothing to complain about with respect to their craft not sustaining their career.  As long as they are actually paid the agreed royalty rate (that's a valid complaint if they are not), they should have no expectations beyond that.

    (Baseball players used here to represent athletes who play pretty much any sport, and musicians refers to any practitioner of the arts, whether actor, comedian, portrait artist, sculptor, etc.)
    edited December 2015
  • Reply 8 of 14
    crowleycrowley Posts: 8,765member
    urahara said:
    manage downloaded content is too time consuming.
    Srsly?
  • Reply 9 of 14
    maestro64maestro64 Posts: 5,005member
    "Many musicians have complained that streaming services like Spotify, Pandora, and Apple Music don't pay well enough to sustain a career"

    I find that statement interesting, because most musicians have been saying similar things about royalties all along. That statement is really about the record labels because they keep most of the royalty money and only pass along a small amount to the artist. Artist make most of their money doing live shows. Record companies usual do not get a cut off the concert money.


    icoco3
  • Reply 10 of 14
    foggyhill said:
    Spotify is in a hell of trouble it seems.
    The Apple assault will just really compound this year as Apple Music gets better and more deeply integrated into the ecosystem.
    I just completely cancelled/closed my Spotify account (which I never ended up using) so at least they can't brag they have x number of subscribers, which is a bunch of bs anyway. I'm sure many many people who still have an inactive account are being tallied as a "subscriber." B-bye Spotify!
  • Reply 11 of 14
    linkmanlinkman Posts: 1,016member
    Everyone with a connection to Spotify complains that they are earning a pittance, losing money, or paying too much for the service. Artists, record labels, paid subscribers, advertisers, and even Spotify itself keep yelling out the same thing! Since 2008 Spotify has paid out over $2 billion US in royalties. I'm getting pretty tired of this. Money is going somewhere.
    cornchip
  • Reply 12 of 14
    gatorguygatorguy Posts: 23,181member
    linkman said:
    Everyone with a connection to Spotify complains that they are earning a pittance, losing money, or paying too much for the service. Artists, record labels, paid subscribers, advertisers, and even Spotify itself keep yelling out the same thing! Since 2008 Spotify has paid out over $2 billion US in royalties. I'm getting pretty tired of this. Money is going somewhere.
    The labels shouldn't be complaining at all. They were the ones who jumped at the chance of signing on with Spotify after years of refusing to do that with others. 
    http://www.theverge.com/2015/5/19/8621581/sony-music-spotify-contract
  • Reply 13 of 14
    zoetmbzoetmb Posts: 2,586member
    maestro64 said:
    "Many musicians have complained that streaming services like Spotify, Pandora, and Apple Music don't pay well enough to sustain a career"

    I find that statement interesting, because most musicians have been saying similar things about royalties all along. That statement is really about the record labels because they keep most of the royalty money and only pass along a small amount to the artist. Artist make most of their money doing live shows. Record companies usual do not get a cut off the concert money.


    No.  Only the most popular artists who play large auditoriums and arenas make money playing live shows.   The typical artist plays a 100 seat club or bar.  Let's assume they sell out at $15 per ticket.   That's $1500 of which the artist generally gets $1050.   So if it's a four person group, that's $256 per night and that has to also pay for food, hotel, traveling expenses, etc.  and management and agent fees come out of that.  

    People used to say that artists have to tour to support the record and that the real money was in the recording.   Now they say the money is not in the recording, it's in the tour.     The fact is that it's almost impossible for most recording artists to make any money today at all.   Obviously, big acts like Springsteen, Billy Joel, Adele and Taylor Swift (among others) are major exceptions.   

    While it's true that most artists never earned out their royalty advances from the labels and many even went "negative", I completely agree with the artists who are fighting for decent royalties from the streaming services.   If the streaming services can't sustain that financially, then so be it.    If you adjust for inflation, the U.S. recording industry is 1/3rd its former peak size.    Too many people and companies think that just because it's technically possible, it's okay to steal from labels and artists.   
  • Reply 14 of 14
    dysamoria said:
    Right. License holders, not artists. How much of that will end up going to artists? A whopping ZERO percent. 
    "License holders" includes artists (the ones who are smart enough to control their own careers, anyway).
    edited December 2015
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