Spotify Hit with a Second Class Action Lawsuit. Much Chaos Possible.

So far, 2016 is shaping up to be a rough year for Spotify. Just before New Year’s, the company was hit with a $150 million class-action lawsuit alleging unpaid mechanical royalties (It’s technical, but I spell it out best I can here.) Now there’s a second suit that pursues many of these same claims. From Billboard:

A class-action lawsuit recently filed against Spotify by Michelman & Robinson, LLP on behalf of Cracker frontman and college professor David Lowery will soon have company, Billboard has learned. The law firm of Gradstein & Marzanno — itself in the midst of litigation on behalf of the Turtles against Sirius XM and Pandora — will file its own class-action suit.

This new suit will make similar claims as Lowery and Michelman’s, alleging that the subscription service is not fully licensed for some of the music it offers subscribers, and that the company is not issuing complete royalty payments. One source counters that additional lawsuits won’t add to Spotify’s problems because the company’s potential liability remains the same regardless. As well, class-action lawsuits are difficult to implement and maintain, especially in instances where similar suits are ongoing in parallel. The law firm was unavailable for comment.

Two suits are bad enough, but it could get worse as the major labels could decide to jump in with their own suits as a way of turning the screws on future licensing negotiations.  And Spotify is not alone. A lot of these issues could touch Apple Music, Rhapsody, Amazon Prime and what Pandora inherited with Radio.

Further reading at Music Business Worldwide. Meanwhile, if you’re a Canadian artist, make sure your music is registered with the Canadian Music Reproduction Rights Association. It’s their job to send out invoices to the streaming music services on behalf of their clients. Without them, there’s an excellent chance your music is getting streamed and you’re not getting paid.

Alan Cross

is an internationally known broadcaster, interviewer, writer, consultant, blogger and speaker. In his 30+ years in the music business, Alan has interviewed the biggest names in rock, from David Bowie and U2 to Pearl Jam and the Foo Fighters. He’s also known as a musicologist and documentarian through programs like The Ongoing History of New Music.

4 thoughts on “Spotify Hit with a Second Class Action Lawsuit. Much Chaos Possible.

  • January 10, 2016 at 10:35 am
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    With these Spotify lawsuits and the change in performance royalty rates, streaming is having a rocky 2016 so far. Makes me wonder what things will look like in the coming months.

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  • January 10, 2016 at 10:56 am
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    Probably because streaming laws are outdated and this is going to make a good company provide lesser entertainment. We’re going to start getting a lot more songs that are over 5 minutes long on the Spotify radio to balance royalty payouts, and a lot more ads… So buy premium, spotify is the best streaming app out there

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  • February 1, 2016 at 10:26 pm
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    It is the beginning of the end to streaming. You can’t take a persons property, distribute it for a profit, and get too far without putting something back. There are laws that govern companies for that. If I go through your house, take what ever I want, (Nikes, IPad, HDTV … ) and let people have it through “Spotify,” it’d be about the same thing. I know bars that don’t pay royalties because they stream over the Internet. Is not it the same product that their patronage enjoys with the bars that pay their proper music venue fees? That bar doesn’t deserve the break, they are stealing. The reason streaming has worked so far is that the major labels think it’s along the same lines as terrestrial radio who’s selective programming made the record companies fat for years. Well, you don’t pay for the radio’s internet connection. You buy a radio one time, and the radio station hopes that you’ll buy their sponsor product by telling you about it over and over by the hour. …

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  • February 1, 2016 at 10:28 pm
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    … If you broadcast a writer’s song to sell these products, you owe the writer the use of their intellectual property, especially if you are a company and you profit by this. Napster opened this up for musicians along time ago. Instead of helping, companies like Spotify, especially Apple and SoundCloud, soak up as much profit as they can and you can go fuck the writer. If they don’t pay the whole nickel per play, the music will go other places that are friendly to the artist, and frankly other places that have moral business values. You’re not gonna find new music on a streaming site. They want you to keep buying the same crap that you’ve had to listen to for years. This is a business model built by the Major Labels. You need to ask your friends on Facebook or Twitter what to listen to or dig through it yourself. There’s a dude behind the curtain pulling the strings about what to play, who gets to play, how often it plays and who gets paid. It’s gonna serve them totally right. People know this. You can’t keep shoving “streaming” in their face. Now the same maladjusted companies want to consider “Live” performance as a streaming royalty ( “live,” the sacred ground of music). It needs to stop. It needs to stop here. They, the streaming companies, need to put something back. They’ve wronged you the listener and they theive the creators of the content. You need to contact the Congress and lobby against streaming, the miss representation of streaming and pay the creator of content. I’ve never met a listener that would “NOT” show a musician respect, I sure gotta phone book of record people that use musicians as a door mat.

    http://reverbnation.com/brydn

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