Music Publishers Send Spotify Cease-And-Desist Over Unlicensed Content Following News The Service Will Pay Less In Royalties
Spotify recently announced that it would begin paying a lower mechanical royalty rate to songwriters and music publishers. Because it has added audiobooks to its premium tier, the streaming service argues that it’s now selling customers a bundle, which by law would allow it to pay royalties at a discounted rate. In response, the National Music Publishers Association (NMPA) told Billboard that the change was “potentially unlawful,” while Billboard estimated that it would result in Spotify paying about $150 million less in mechanical royalties in the next year.
Now, Billboard reports that the NMPA has issued a cease-and-desist letter to Spotify for allegedly hosting lyrics, music videos, and podcast content that contain unlicensed use of copyrighted musical works. “Spotify appears to be engaged in direct infringement by hosting unlicensed musical works in its lyrics, videos and podcasts and by distributing unauthorized reproductions, synchronizations, displays and derivative sues of these musical works to its users,” reads the letter, penned by NMPA’s executive VP and general counsel Danielle Aguirre. “Making matters worse, Spotify profits from such infringement.” The letter does not name any specific unlicensed works or provide a number of infringements.
It’s not directly connected to the mechanical royalties issue, but Billboard interprets the move as a possible retaliation.
UPDATE: A spokesperson from Spotify offered the following statement to Stereogum:
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 rightsholders to contact Spotify about any content they believe is unlicensed.
UPDATE 2: According to Billboard, the Mechanical Licensing Collective (the MLC) has filed a lawsuit against Spotify, calling the change “improper.” “The financial consequences… are enormous for songwriters and music publishers,” the complaint reads. It also claims that “premium is exactly the same service” as it was prior.
Spotify responded with a statement, saying, “The lawsuit concerns terms that publishers and streaming services agreed to and celebrated years ago under the Phono IV agreement. Bundles were a critical component of that settlement, and multiple DSPs include bundles as part of their mix of subscription offerings. Spotify paid a record amount to publishers and societies in 2023 and is on track to pay out an even larger amount in 2024. We look forward to a swift resolution of this matter.”