The relationship of Spotify and Swedish collecting society STIM has encountered a bump in the road, relating to the terms of their royalties agreement.
“We have informed our rightsholders that the royalties from Spotify will be delayed, since Spotify has not yet payed the invoice regarding Q4 2016,” STIM’s spokesperson told Music Ally.
“We have invoiced according to the same routines as during the whole of 2016, but Spotify now makes a new interpretation of the terms of our current agreement. STIM’s position is that already agreed principles and business standards shall apply.”
The spokesperson added that STIM is in “constructive discussions with Spotify to have this resolved in a quick manner”, so that it can pay out the royalties as soon as possible.
For its part, Spotify’s spokesperson provided this statement to Music Ally:
“We are always working to ensure that royalties are paid out to rightsholders in a correct and efficient way. Spotify offered to pay STIM the full amount to matched rightsholders, but STIM declined,” said the spokesperson.
“The amount in dispute relates to unmatched tracks. We are actively working with STIM on having this resolved in order to present rightsholders with their earned royalties.”
This is the second time that STIM’s Spotify payouts have been delayed. In September 2016, payments for the first quarter of that year were delayed for two weeks, although that was due to negotiations still being finalised at the time those payouts should have been distributed.
In February 2015, Spotify was also criticised by a group of Swedish songwriters, who published an open letter calling on the company to pay a larger share of its revenues to songwriters.
The problem of unmatched tracks, where a streaming service does not have the necessary metadata to identify a song’s rightsholders, is a problem for Spotify and other streaming services alike.
It was one of the core issues in the class-action lawsuits launched in the US by artists David Lowery and Melissa Ferrick, which were subsequently combined, and recently resulted in a settlement that involves Spotify paying just under $43.5m.
Spotify has been building its own database linking works to recordings, while in April it acquired startup Mediachain, which has been exploring blockchain technology as one potential solution to these matching challenges.