The long-bubbling lawsuit between 19 Recordings and Sony Music is turning up its heat, with the American Idol-related company levelling new accusations concerning Sony’s deal with Spotify. Billboard reports that 19 is targeting the major label’s stake in the streaming service, as well as its contractual agreements on advertising space and revenues,
and the allegation that majors have accepted lower royalty rates from Spotify in return for these provisions that could swell the streaming service’s valuation. “Each of the major record labels also own an interest in Spotify, claimed an amended complaint from 19 seen by Billboard. “On information and belief, those other record labels have engaged in the same self-dealing as Sony with respect to the diversion of payments to them, and the below market streaming royalty rates to artists.” The bigger picture here is the debate over whether artists are losing out in the digital deals struck by their labels, with streaming equity questions the new ‘licence or sale for ringtones and downloads’ in that respect.