Important Information For Songwriters
SPOTIFY—PRIVATE DEALS AND THE MLC LAWSUIT
Over the past few days there has been dizzying developments regarding the streaming giant SPOTIFY that may impact the terrible “bundling” scheme they unilaterally announced a year ago.
BACKGROUND: The Nashville Songwriters Association International (NSAI) and National Music Publishers Association (NMPA) spent ten long years before the Copyright Royalty Board (CRB) litigating against Spotify and other digital services for higher streaming rates. We won the largest increase in history, a 43.5% increase, but the services appealed and in late 2023 that rate increase was upheld.
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Just weeks later, in February 2024, Spotify and NO OTHER streaming service came up with their infamous “bundling” scheme. They took over forty million customers who had purchased their music plan and without their permission moved them to a “bundle” featuring music and audiobooks. However, they limited audiobook consumption to only 15 hours per month and somehow determined a revenue sharing configuration that has cost songwriters an estimated loss in royalties over the past year of a hundred million dollars or more.
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In May 2024, the Mechanical Licensing Collective (MLC) sued Spotify alleging that the service’s “bundle” was improper because of the value they placed on the audiobook portion – one they had previously offered for free!
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DEALS: In November 2024 Amazon announced a similar music/audiobook bundle, but said they would NOT decrease payments for music.
In late January Universal Music Group and Spotify announced a new private deal that reportedly rolled back bundling losses for songwriters.
In early February Warner Chappell announced another private deal with Spotify that according to reports “supersedes” the catastrophic Spotify bundling plan.
MLC LAWSUIT DISMISSED: Just before the Warner Chappel deal was announced the lawsuit the MLC filed against Spotify for their “bundle” was dismissed. “This was more than surprising,’ said NSAI Executive Director Bart Herbison. “We don’t believe the ruling was accurate and hope that the Mechanical Licensing Collective appeals.”
WHAT’S NEXT?
“It is critical to note that the private deals with Universal Music Group and Warner Chappell are ones we can use at the next Copyright Royalty Board,” Herbison continued. “We are waiting to see if more deals are announced, or if the MLC lawsuit dismissal has an impact on such deals.”
“Either way Spotify has been the lone streaming company to utilize a “bundle” that costs songwriters hundreds of millions of dollars, all while their founder and top executives cashed in hundreds of millions in stock. We have reasons to believe that the private deals are likely in Spotify’s best interest, but once again extend our plea for them to pay songwriters fair compensation. The truth of NSAI’s motto, ‘It All Begins with a Song’ is illustrated by the billions of dollars Spotify collects based on the brilliance of songwriters and composers.”
MAJOR RULING ON COPYRIGHT TERMINATION
A ruling by a Louisiana Judge could have a global impact on songwriters terminating their copyrights. More: