Artists including La Roux, Joanna Newsom and James Blunt may be keeping the Spotify royalties rows bubbling, but the streaming service may have a bigger problem to deal with focused on publishing royalties.
It all kicked off yesterday with an announcement by independent label Victory Records that its catalogue had been pulled from Spotify “as a result of Spotify not properly paying publishing revenues due to Victory Records’ artists”.
The label made specific allegations: that an audit of Spotify revealed 53m streams that had not had publishing royalties paid; and that Victory had declined to sign a contract granting Spotify mechanical clearance to use its music, due to a conflict with its deal with royalty-collecting firm Audiam.
“The bottom line is that artists and songwriters are not being paid and fans of Victory’s artists cannot listen to the music,” claimed the label.
Cats, pigeons, feathers and blood all over the place. Again.
The Wall Street Journal has since fleshed out what’s happening here: for now, this dispute concerns US streams only; and the claim by Victory’s sister company Another Victory Music Publishing based on Audiam’s audit.
“Spotify has pulled down the Victory Records sound recordings in response to us asking for them to pay for the 53 million streams that have not yet been paid on,” said Audiam CEO Jeff Price.
Yet Spotify’s Jonathan Prince said that neither company had provided the data to substantiate their claim. “Given that we don’t have that information, we felt we had no choice but to temporarily take down their content until we can come to a resolution,” said Prince.
Price has disputed this point, claiming that Audiam provided “all the detailed songwriter information for the over 3,000 sound recordings they had not paid on” five months ago.
Billboard has since weighed in with the bigger – and more worrying for Spotify and its rivals – picture, noting that while this particular dispute could amount to nearly $23k in royalty payments, it could be the tip of an iceberg.
National Music Publishers Association (NMPA) boss David Israelite claims that as much as 25% of streaming royalty payments from a range of services are “not being paid to publishers, or are being distributed to the wrong entities”, fuelling estimates of anywhere between $50m and $100m trapped in “black boxes” within the services.
“We are in discussions on how to resolve this issue, and the talks are very productive. This is not a contentious issue. I am not alleging any bad faith on the part of the services,” said Israelite. An important point about the ongoing issues of rights identification and royalty flows within the music industry, but one that may well get lost amid a new wave of Spotify-bashing.
Questions about whether that service and its rivals could do more to route payments to the right creators are justified, but there are searching questions for every participant in this particular value chain too.