Shortly after our music locker service debuted, we got sued by all the major labels. I spent 4 months writing tools to pull all the discovery data for their lawsuits.
When it was apparent our court case was going south, the major music publishers sued us as well (lead by Harry Fox Agency). I spent another 4 months pulling discovery data for those lawsuits.
When those court cases trended badly for us, we got sued by every 2 bit operation that owned a partial percentage of the country-based rights to a song (ie, one company may of owned 4% the rights of a song in the United States and 10% in Mexico and 9.3% in Ireland, with another company owning 1.3%, 40%, .5% respectively). I spent another 4 months pulling discovery data for those lawsuits.
Finally, after we where acquired by Vivendi Universal and they took on our liabilities, I spent almost a year writing tools for them to pay these partial percentages. Have you ever had to split 1 cent via check between 3 parties? It's not fun.
Moral of this boring story is Spotify better win this fast and clean or they are in a world of pain; I can never get those 2 years of my life back.
This article reads like a press release from the plantiff (Wixen) and took a little googling to unwind. Long story short, it sounds like there's disagreement about what type of license Spotify needs. Spotify has previously claimed that streaming is not "reproduction" and is more akin to "performance"... and they (may) have those licenses. What they do not have (in some cases?) is a "mechanical" license[1], which carries requirements for notification and payment that Spotify claims are onerous.[2]
Thus, I'd re-write the lede of this story to:
Music streaming company Spotify was sued by Wixen Music
Publishing Inc last week for allegedly using thousands of
songs... without [the right kind of] license and
[associated kind of notification and] compensation to the
music publisher.
[1] https://www.harryfox.com/license_music/what_is_mechanical_li... - Incidentally, this is HFM, the same firm Spotify uses for "third-party" licensing. They define a mechanical license to include the right to "reproduce and distribute copyrighted musical compositions (songs) on ... interactive streams and other digital configurations." Seems a little damning for Spotify.
"The Settlement Agreement is procedurally and substantively unfair to Settlement Class Members because it prevents meaningful participation by rights holders and offers them an unfair dollar amount in light of Spotify’s ongoing, willful copyright infringement of their works," ...
"In reaction, Spotify has been questioning whether Wixen has really been authorized by its clients (including Andrew Bird, Kenny Rogers, and Jim Morrison's heirs) to take its aggressive actions. Songwriters have administrative agreements with Wixen allowing the publisher to negotiate licensing deals, but Spotify has pointed out these agreements are silent about litigation."
This is a bit confusing. My understanding of how music publishing works is that the copyright is usually assigned to the publisher (for a limited amount of time), so any rights of the copyright holder are rights of the publisher. They wouldn't have to explicitly assign litigation rights to the publisher.
Disclaimer: IANAL, and with big artists, publishing deals can be very very different from boilerplate.
The reason this is being brought up is because often these litigations end with zero funds being transferred to the artists themselves. It’s not in the artists interests to sue for _damages_ if they make no money. That is the sketchy thing that this type of litigation exudes.
The pieces don't quite fit together here - Harry Fox handles a LOT of licensing (they're one of the places you can get mechanical licenses for cover songs via self-service) and I'd assume that a big contract for an organization the size of Spotify would include at least some indemnification for any legal issues.
And, naturally, the damage amount is wildly unrelated to actual revenues - not quite the "one download on Napster == $250k" levels seen in copyright litigation against consumers, but still almost half of Spotify's likely revenue for 2017...
This article adds a bit more context. Spotify claims that Wixen is overstepping their authority as music licensors and suing on behalf of clients who have not given Wixen that authority.
Reminds me of the 2010s, when a company named RightHaven was hired by media companies to sue bloggers/message boards upon finding copies or excerpts of news articles. Ostensibly Righthaven had the authority of the clients, but were ruled as not having the legal standing to sue https://en.m.wikipedia.org/wiki/Righthaven
That article is discussing several different legal actions. I understood Spotify's comments regarding the artists to be in reference to the class action lawsuite Wixen is (in their opinion) interfering in.
In general to have standing you need to show you have been directly harmed. The exclusive licensee of a song would be directly harmed if someone distributed it without paying for a license. So while Wixen may not have standing in a class-action lawsuit filed on behalf of the original artisits, they would have standing in their own action which they have now filed.
> In May, the Stockholm, Sweden-based company agreed to pay more than $43 million to settle a proposed class action alleging it failed to pay royalties for some of the songs it makes available to users.
This number seems closer to reality. It may be Tom Petty, Neil Young, and the Doors, but they're not worth nearly 10% of Spotify's valuation, and that certainly wouldn't match a compensatory amount in revenue that Spotify failed to pay.
Are they aiming for some punitive measure? Or are they going to settle for 5% of this in the near future?
> but they're not worth nearly 10% of Spotify's valuation
FYI - This is very likely not the metric they're after and so it's probably not helpful to frame against it. Valuation is a measure of the value of the company at any given time. In this case they're seeking damages for revenues that Spotify has made in the past as a result of alleged unlicensed content.
If you're trying to scope against Spotify's valuation, then likely you'd be looking at their earnings/profit, which as of reports since October 2017 is still negative. In other words, if there is indeed $1.6B to pay for unpaid royalties, then Spotify's already abysmal financials are going to look even worse.
> This number seems closer to reality. It may be Tom Petty, Neil Young, and the Doors, but they're not worth nearly 10% of Spotify's valuation
Why not? Is there some plausible way to build a $19bn company that lets you listen to music without the works of major globally famous artists?
I am willing to agree with you intuitively that this suit is overstating damages as well, but it's definitely not a prima facie argument, you'll have to support that point of view with facts.
> 1.Wixen brings this action against Spotify for willfully infringing the copyrights in the musical compositions listed in Exhibit A (each a “Work” and collectively the “Works”). Wixen is an independent music publisher and exclusive licensee of the Works, all of which have either been registered or are pending registration with the United States Copyright Office. Spotify is the world’s most dominant music streaming and limited downloading service. As Spotify has publicly admitted, and as recent lawsuits and settlements confirm, Spotify has repeatedly failed to obtain necessary statutory, or “mechanical,” licenses to reproduce and/or distribute musical compositions on its service. Consequently, while Spotify has become a multibillion dollar company, songwriters and their publishers, such as Wixen, have not been able to fairly and rightfully share in Spotify’s success, as Spotify has in many cases used their music without a license and without compensation.
2.A recent proposed settlement involving rights holders and Spotify inthe class action lawsuit Ferricket al. v. Spotify USA Inc. et al.,No. 1:16-cv-8412(AJN) (S.D.N.Y.)(Dkt. # 167-3 (“Proposed Settlement”))does not adequately compensate Wixen or the songwriters it represents. Wixen has and, to the extent not yet effected, will opt out the Works from the Proposed Settlement.
They used to be peer-to-peer, and they'd give "free" service to employees of certain big tech companies because they could take advantage of the upload bandwidth of the big tech offices.
They culled the P2P tech in 2014 and went to a standard server-client model.
Though that was from a beta and in an unsure time of how the service would turn out.
Just because a service starts by doing dubious things, does not mean it will continue doing so.
It is my belief that their library was in some portion built by exflitrating data from user's computers.
I have an enormous collection of lossless audio and noticed it using lots of bandwidth. The desktop versions insist on loading when the machine boots, and use subsantial amounts of bandwidth/memory at idle.
There is a little (understandable) confusion in some of the comments here.
The issue here is not that Spotify is infringing copyright (so it’s nothing to do with BitTorrent etc) but rather that Wixen says that it has not been paid correctly for the mechanical exploitation of the copyrights it administers. This is complex for several reasons.
First of all: the recordings in question have without doubt been legitimately supplied to Spotify by the record labels of the artists in question.
Secondly - a record label controls only one of the two copyrights in a song - the recording copyright.
It is impossible to record a song without using the other fundamental copyright in music - which is the song itself. The literal words and music.
This is the copyright that the publisher controls - and which Wixen claims has not been properly accounted.
Third point: When the words-and-music copyright is reproduced by mechanical means for commercial gain the publisher is due a royalty - this royalty is known as “mechanicals”.
In the “old” music business when a label pressed a record they paid out the “mechanicals” to the publisher directly - for every record pressed they owed a set amount. So this was easy to track and it meant that the money flowed directly from label to publisher based on volume of records manufactured and sold.
Point number four: Spotify’s licensing regime is complex. They need to pay a royalty for the use of the sound recording. This generally goes direct to the label or artist if they self release often via their distributor).
The mechanical reproduction of the words-and-music copyright is much less straight forward in terms of how the money flows.
The reason for this is that songwriters and the performers of a song are not always the same person - though they may also be the same person. This is where publishers come into play. If I write a song, I may not be able to record and perform it sufficiently to generate good revenue from that work. So if I can persuade a high profile artist to perform and record it I will probably make much more money from my words and music. A publisher’s job is to maximise the commercial exploitation of my words and music. This can be done in several ways - first of all, they go and shop my song around to labels in the hope that an A&R at a label (basically someone a bit like a product manager in a tech company) will see a good fit between my song and an artist that they work with. The artist records the song and I generate money in two ways - first of all the mechanicals previously discussed, but also from “performance” royalties - which is where my song is performed live to an audience. So a prominent artist performs my song on a tour - the audience in the arena have paid good money for tickets, and the artist would not have any material without my song and other songs. This also needs to be compensated, and this is done through a “performance royalty” which is generally a split of Ickes revenues.
There are other revenue streams as well, and a publisher’s job is to manage and administer these revenues as effectively as possible.
Now: I mentioned Spotify has a complex licensing model. When you play a song through Spotify it is being mechanically reproduced (the data that makes the audio waveform is being transmitted from one machine to another) but the audio is also being performed by the Spotify application on your computer. So Spotify needs to pay out a mechanical royalty and a performance royalty.
It used to be that the mechanical royalty was paid out by the label - but as the label is no longer pressing discs the “replication” of the music has passed to Spotify, and so Spotify is liable.
In the “old” music business once you bought the record or CD the revenue flow ended: your CD player manufacturer was not continuing to benefit each time you played a disc. So the “performance” of the music did not have a revenue stream attached to it, assuming that you were enjoying the music in the privacy of your own home.
But Spotify can be seen to benefit each time you play a song, because you pay an ongoing subscription for access to the music.
So a performance royalty is also due.
Now: further complexity. In many territories songwriters and publishers assign the management of performance and mechanical royalties to third parties. In the U.K. for example a songwriter will join PRS - the performing right society, which administers performance copyright for the words-and-music copyright in a song. They should also join the MCPS - the Mechanical Copyright Protection Society - to collect mechanical royalties. These organisations and others like them in other territories are known as Collective Management Organisations or “CMOs”.
Spotify has deals with these two organisations (PRS/MCPS) - and generally also with the equivalent CMOs around the world. Spotify says “this song was streamed X times and so we owe Y for mechanical royalties and Z for performance royalties. This money is then paid trough the CMOs to the publishers/songwriters. You cannot - as a publisher or an artist - get this money directly from Spotify.
This works on one level because it means that so long as a work is correctly identified in the database of the CMOs and that whoever is performing or mechanically reproducing a song submits accurate data showing how and when hat song was reproduced and what revenue is attached then it all works perfectly. More critically the CMO mechanism makes it possible for services like Spotify to exist (and even for live concerts to happen) because otherwise anyone who wanted to put on a concert would need to obtain the permission of every songwriter individually before their songs could be performed.
However - you need to keep in mind that this system was invented when sheet music and clockwork pianos where the main way that words-and-music copyright was mechanically reproduced, and performance was limited to someone standing up and singing the song in a concert hall.
So far, so complex.
To add a further few layers of complexity:
There is no authoratitive database that says “this words-and-music is the copyright of Tom Petty”. Additionally, when a record label ingests music into the Spotify catalogue there is no requirement to specify who wrote the words-and-music.
The way it works is that (in essence) Spotify sends the CMOs a list of everything that has been played and the CMOs say “I represent that words-and-music copyright in X territory - so you owe me $X representing Y streams.”
It’s a pretty clunky system - but as yet, no one has really come up with a better solution. Technology moved faster than copyright admin.
Add into the mix that some artists may not register with the appropriate CMOs; some artists may not have a publisher; some labels may be releasing cover versions of songs where they have not directly obtained the permission of the copyright holder - but this is ok because in theory the words-and-music royalties flow from Spotify through the CMOs to the copyright holders.
So it’s a very complex case and hinges on whether the relevant CMOs had been delegated authority by songwriters/copyright holders/publishers to exploit those works and whether Spotify was accurately accounting and paying out for the use of the copyrights.
So it’s not about BitTorrent or Spotify having pirated music and is everything to do with how technology, the exploitation of copyright and how money flows through music are all a bit out of sync with each other.
Excellent explanation. But to complicated matters further, your description applies mainly to European licensing. The US music publishing workflow is different.
In the US, there is no CMO. After agreeing to a license, music publishers send their composition (word-and-music) catalog information directly to Spotify. There is no requirement that they need to send the associated recording with their musical composition. So the burden is on Spotify to match the composition up with the recording to recognize if the recording's underlying composition is licensed. (The recording is licensed because the actual audio file was sent to Spotify by the label).
So then Spotify needs to tie all this data together. Compositions can be owned by 5 publishers, who are all sending separate catalog files. Again, no requirement to send an unique identifier to tie these all are up. So Spotify does the best it can to associate all this data to figure out if a recording is licensed, but ultimately, they cannot verify millions of tracks. So they make business decisions that carry risk so people can listen to music. They can say, if we have 90% ownership, we will treat it as licensed or some other deviation from affirmatively knowing every copyright owner without a doubt.
So then the music publisher finds a handful of tracks that slipped through and were unlicensed. And they sue. And technically, those tracks were unlicensed, but its not for lack of trying from Spotify. And no music industry player is helping solve the metadata standards or systemic issues. They just lie in wait and sue for money or as a negotiation tactic. And they exploit the "Spotify is ripping off artists" narrative, when in reality, Spotify is working very hard and investing a lot of money to pay out artist and writers properly.
These lawsuits are very dishonest, but legally defensible. There are not in the spirit of any productive working relationship with the MAIN distribution channel of your product!
For anyone concerned, there's nothing to worry about! This specific article isn't directly sponsored. It's just a generic ad network at the bottom that's 'SPONSORED'.
Seems opportunistic. They file for IPO and this lawsuit comes out at the same time? Almost certainly not a coincidence. This is arguably when Spotify is most vulnerable and when they will be most likely to settle -- investors hate uncertainty, so settling, even for a large amount, would probably be good for the IPO.
I'm seeing several comments here that assume the lawsuit to be over recordings, but Wixen manages "mechanical licenses" (rights to melody and lyrics), not recordings.
Mechanical licenses are governed very differently from recordings. For one, they are subject to compulsory licensing, which allows you pay a statutory rate to license them, as opposed to directly licensing them from the rightsholder. The suit alleges that Spotify did neither in this case.
Thinking about it, part of the reasons music labels got big is for economy of scale when mass producing CDs for example. Of course, such economy of scale was not needed anymore with the move to digital distribution. This didn't work well with the current debt-based economy where shareholders depends on stocks always going up for things like retirements. I assume that Hollywood has similar problems, right?
[+] [-] agrippanux|8 years ago|reply
Shortly after our music locker service debuted, we got sued by all the major labels. I spent 4 months writing tools to pull all the discovery data for their lawsuits.
When it was apparent our court case was going south, the major music publishers sued us as well (lead by Harry Fox Agency). I spent another 4 months pulling discovery data for those lawsuits.
When those court cases trended badly for us, we got sued by every 2 bit operation that owned a partial percentage of the country-based rights to a song (ie, one company may of owned 4% the rights of a song in the United States and 10% in Mexico and 9.3% in Ireland, with another company owning 1.3%, 40%, .5% respectively). I spent another 4 months pulling discovery data for those lawsuits.
Finally, after we where acquired by Vivendi Universal and they took on our liabilities, I spent almost a year writing tools for them to pay these partial percentages. Have you ever had to split 1 cent via check between 3 parties? It's not fun.
Moral of this boring story is Spotify better win this fast and clean or they are in a world of pain; I can never get those 2 years of my life back.
[+] [-] basseq|8 years ago|reply
Thus, I'd re-write the lede of this story to:
[1] https://www.harryfox.com/license_music/what_is_mechanical_li... - Incidentally, this is HFM, the same firm Spotify uses for "third-party" licensing. They define a mechanical license to include the right to "reproduce and distribute copyrighted musical compositions (songs) on ... interactive streams and other digital configurations." Seems a little damning for Spotify.[2] https://www.hollywoodreporter.com/thr-esq/spotify-dont-compa...
[+] [-] bwang29|8 years ago|reply
And Quote :
"The Settlement Agreement is procedurally and substantively unfair to Settlement Class Members because it prevents meaningful participation by rights holders and offers them an unfair dollar amount in light of Spotify’s ongoing, willful copyright infringement of their works," ...
"In reaction, Spotify has been questioning whether Wixen has really been authorized by its clients (including Andrew Bird, Kenny Rogers, and Jim Morrison's heirs) to take its aggressive actions. Songwriters have administrative agreements with Wixen allowing the publisher to negotiate licensing deals, but Spotify has pointed out these agreements are silent about litigation."
[+] [-] wrigby|8 years ago|reply
Disclaimer: IANAL, and with big artists, publishing deals can be very very different from boilerplate.
[+] [-] txsh|8 years ago|reply
[+] [-] invisible|8 years ago|reply
[+] [-] al2o3cr|8 years ago|reply
And, naturally, the damage amount is wildly unrelated to actual revenues - not quite the "one download on Napster == $250k" levels seen in copyright litigation against consumers, but still almost half of Spotify's likely revenue for 2017...
[+] [-] donarb|8 years ago|reply
https://www.hollywoodreporter.com/thr-esq/spotify-hit-16-bil...
[+] [-] danso|8 years ago|reply
[+] [-] jeremyjh|8 years ago|reply
In general to have standing you need to show you have been directly harmed. The exclusive licensee of a song would be directly harmed if someone distributed it without paying for a license. So while Wixen may not have standing in a class-action lawsuit filed on behalf of the original artisits, they would have standing in their own action which they have now filed.
[+] [-] alehul|8 years ago|reply
This number seems closer to reality. It may be Tom Petty, Neil Young, and the Doors, but they're not worth nearly 10% of Spotify's valuation, and that certainly wouldn't match a compensatory amount in revenue that Spotify failed to pay.
Are they aiming for some punitive measure? Or are they going to settle for 5% of this in the near future?
[+] [-] mbesto|8 years ago|reply
FYI - This is very likely not the metric they're after and so it's probably not helpful to frame against it. Valuation is a measure of the value of the company at any given time. In this case they're seeking damages for revenues that Spotify has made in the past as a result of alleged unlicensed content.
If you're trying to scope against Spotify's valuation, then likely you'd be looking at their earnings/profit, which as of reports since October 2017 is still negative. In other words, if there is indeed $1.6B to pay for unpaid royalties, then Spotify's already abysmal financials are going to look even worse.
[+] [-] ggg9990|8 years ago|reply
[+] [-] CPLX|8 years ago|reply
Why not? Is there some plausible way to build a $19bn company that lets you listen to music without the works of major globally famous artists?
I am willing to agree with you intuitively that this suit is overstating damages as well, but it's definitely not a prima facie argument, you'll have to support that point of view with facts.
[+] [-] HenryBemis|8 years ago|reply
This way the lawyers get a nice 20% cut and Wyxen also gets a decent USD48m which is close to the USD42m that alehul mentioned above.
[+] [-] IncRnd|8 years ago|reply
2.A recent proposed settlement involving rights holders and Spotify inthe class action lawsuit Ferricket al. v. Spotify USA Inc. et al.,No. 1:16-cv-8412(AJN) (S.D.N.Y.)(Dkt. # 167-3 (“Proposed Settlement”))does not adequately compensate Wixen or the songwriters it represents. Wixen has and, to the extent not yet effected, will opt out the Works from the Proposed Settlement.
From the actual lawsuit. https://www.scribd.com/document/368281292/Wixen-Music-Publis...
[+] [-] brudgers|8 years ago|reply
[+] [-] seibelj|8 years ago|reply
[+] [-] HenryBemis|8 years ago|reply
[+] [-] turc1656|8 years ago|reply
[+] [-] cbhl|8 years ago|reply
They used to be peer-to-peer, and they'd give "free" service to employees of certain big tech companies because they could take advantage of the upload bandwidth of the big tech offices.
They culled the P2P tech in 2014 and went to a standard server-client model.
https://techcrunch.com/2014/04/17/spotify-removes-peer-to-pe...
[+] [-] thomastjeffery|8 years ago|reply
[+] [-] Insanity|8 years ago|reply
[+] [-] oceanghost|8 years ago|reply
I have an enormous collection of lossless audio and noticed it using lots of bandwidth. The desktop versions insist on loading when the machine boots, and use subsantial amounts of bandwidth/memory at idle.
[+] [-] adamnemecek|8 years ago|reply
[+] [-] nailer|8 years ago|reply
[+] [-] saaaaaam|8 years ago|reply
The issue here is not that Spotify is infringing copyright (so it’s nothing to do with BitTorrent etc) but rather that Wixen says that it has not been paid correctly for the mechanical exploitation of the copyrights it administers. This is complex for several reasons.
First of all: the recordings in question have without doubt been legitimately supplied to Spotify by the record labels of the artists in question.
Secondly - a record label controls only one of the two copyrights in a song - the recording copyright.
It is impossible to record a song without using the other fundamental copyright in music - which is the song itself. The literal words and music.
This is the copyright that the publisher controls - and which Wixen claims has not been properly accounted.
Third point: When the words-and-music copyright is reproduced by mechanical means for commercial gain the publisher is due a royalty - this royalty is known as “mechanicals”.
In the “old” music business when a label pressed a record they paid out the “mechanicals” to the publisher directly - for every record pressed they owed a set amount. So this was easy to track and it meant that the money flowed directly from label to publisher based on volume of records manufactured and sold.
Point number four: Spotify’s licensing regime is complex. They need to pay a royalty for the use of the sound recording. This generally goes direct to the label or artist if they self release often via their distributor).
The mechanical reproduction of the words-and-music copyright is much less straight forward in terms of how the money flows.
The reason for this is that songwriters and the performers of a song are not always the same person - though they may also be the same person. This is where publishers come into play. If I write a song, I may not be able to record and perform it sufficiently to generate good revenue from that work. So if I can persuade a high profile artist to perform and record it I will probably make much more money from my words and music. A publisher’s job is to maximise the commercial exploitation of my words and music. This can be done in several ways - first of all, they go and shop my song around to labels in the hope that an A&R at a label (basically someone a bit like a product manager in a tech company) will see a good fit between my song and an artist that they work with. The artist records the song and I generate money in two ways - first of all the mechanicals previously discussed, but also from “performance” royalties - which is where my song is performed live to an audience. So a prominent artist performs my song on a tour - the audience in the arena have paid good money for tickets, and the artist would not have any material without my song and other songs. This also needs to be compensated, and this is done through a “performance royalty” which is generally a split of Ickes revenues.
There are other revenue streams as well, and a publisher’s job is to manage and administer these revenues as effectively as possible.
Now: I mentioned Spotify has a complex licensing model. When you play a song through Spotify it is being mechanically reproduced (the data that makes the audio waveform is being transmitted from one machine to another) but the audio is also being performed by the Spotify application on your computer. So Spotify needs to pay out a mechanical royalty and a performance royalty.
It used to be that the mechanical royalty was paid out by the label - but as the label is no longer pressing discs the “replication” of the music has passed to Spotify, and so Spotify is liable.
In the “old” music business once you bought the record or CD the revenue flow ended: your CD player manufacturer was not continuing to benefit each time you played a disc. So the “performance” of the music did not have a revenue stream attached to it, assuming that you were enjoying the music in the privacy of your own home.
But Spotify can be seen to benefit each time you play a song, because you pay an ongoing subscription for access to the music.
So a performance royalty is also due.
Now: further complexity. In many territories songwriters and publishers assign the management of performance and mechanical royalties to third parties. In the U.K. for example a songwriter will join PRS - the performing right society, which administers performance copyright for the words-and-music copyright in a song. They should also join the MCPS - the Mechanical Copyright Protection Society - to collect mechanical royalties. These organisations and others like them in other territories are known as Collective Management Organisations or “CMOs”.
Spotify has deals with these two organisations (PRS/MCPS) - and generally also with the equivalent CMOs around the world. Spotify says “this song was streamed X times and so we owe Y for mechanical royalties and Z for performance royalties. This money is then paid trough the CMOs to the publishers/songwriters. You cannot - as a publisher or an artist - get this money directly from Spotify.
This works on one level because it means that so long as a work is correctly identified in the database of the CMOs and that whoever is performing or mechanically reproducing a song submits accurate data showing how and when hat song was reproduced and what revenue is attached then it all works perfectly. More critically the CMO mechanism makes it possible for services like Spotify to exist (and even for live concerts to happen) because otherwise anyone who wanted to put on a concert would need to obtain the permission of every songwriter individually before their songs could be performed.
However - you need to keep in mind that this system was invented when sheet music and clockwork pianos where the main way that words-and-music copyright was mechanically reproduced, and performance was limited to someone standing up and singing the song in a concert hall.
So far, so complex.
To add a further few layers of complexity:
There is no authoratitive database that says “this words-and-music is the copyright of Tom Petty”. Additionally, when a record label ingests music into the Spotify catalogue there is no requirement to specify who wrote the words-and-music.
The way it works is that (in essence) Spotify sends the CMOs a list of everything that has been played and the CMOs say “I represent that words-and-music copyright in X territory - so you owe me $X representing Y streams.”
It’s a pretty clunky system - but as yet, no one has really come up with a better solution. Technology moved faster than copyright admin.
Add into the mix that some artists may not register with the appropriate CMOs; some artists may not have a publisher; some labels may be releasing cover versions of songs where they have not directly obtained the permission of the copyright holder - but this is ok because in theory the words-and-music royalties flow from Spotify through the CMOs to the copyright holders.
So it’s a very complex case and hinges on whether the relevant CMOs had been delegated authority by songwriters/copyright holders/publishers to exploit those works and whether Spotify was accurately accounting and paying out for the use of the copyrights.
So it’s not about BitTorrent or Spotify having pirated music and is everything to do with how technology, the exploitation of copyright and how money flows through music are all a bit out of sync with each other.
[+] [-] muzikbiz|8 years ago|reply
In the US, there is no CMO. After agreeing to a license, music publishers send their composition (word-and-music) catalog information directly to Spotify. There is no requirement that they need to send the associated recording with their musical composition. So the burden is on Spotify to match the composition up with the recording to recognize if the recording's underlying composition is licensed. (The recording is licensed because the actual audio file was sent to Spotify by the label).
So then Spotify needs to tie all this data together. Compositions can be owned by 5 publishers, who are all sending separate catalog files. Again, no requirement to send an unique identifier to tie these all are up. So Spotify does the best it can to associate all this data to figure out if a recording is licensed, but ultimately, they cannot verify millions of tracks. So they make business decisions that carry risk so people can listen to music. They can say, if we have 90% ownership, we will treat it as licensed or some other deviation from affirmatively knowing every copyright owner without a doubt.
So then the music publisher finds a handful of tracks that slipped through and were unlicensed. And they sue. And technically, those tracks were unlicensed, but its not for lack of trying from Spotify. And no music industry player is helping solve the metadata standards or systemic issues. They just lie in wait and sue for money or as a negotiation tactic. And they exploit the "Spotify is ripping off artists" narrative, when in reality, Spotify is working very hard and investing a lot of money to pay out artist and writers properly.
These lawsuits are very dishonest, but legally defensible. There are not in the spirit of any productive working relationship with the MAIN distribution channel of your product!
[+] [-] stemuk|8 years ago|reply
[+] [-] Bilters|8 years ago|reply
[+] [-] huac|8 years ago|reply
[+] [-] KasianFranks|8 years ago|reply
[+] [-] thomastjeffery|8 years ago|reply
Spotify wouldn't even exist without illegal file sharing on the outset.
[+] [-] sp332|8 years ago|reply
Edit: Ok thanks for the screenshots. I disabled my adblocker but they're still not showing up. Probably just something broken.
[+] [-] gkoberger|8 years ago|reply
[+] [-] abluecloud|8 years ago|reply
[+] [-] unknown|8 years ago|reply
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[+] [-] connorelsea|8 years ago|reply
[+] [-] likpok|8 years ago|reply
[+] [-] uptown|8 years ago|reply
[+] [-] thesagan|8 years ago|reply
[+] [-] unknown|8 years ago|reply
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[+] [-] unknown|8 years ago|reply
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[+] [-] JOnAgain|8 years ago|reply
[+] [-] cbhl|8 years ago|reply
When Spotify was in a spat with Taylor Swift's former label, the two companies couldn't even agree on how much in royalties she was making a year. https://www.theverge.com/2014/11/13/7213775/taylor-swift-spo...
[+] [-] mortenjorck|8 years ago|reply
Mechanical licenses are governed very differently from recordings. For one, they are subject to compulsory licensing, which allows you pay a statutory rate to license them, as opposed to directly licensing them from the rightsholder. The suit alleges that Spotify did neither in this case.
[+] [-] yuhong|8 years ago|reply
[+] [-] endlessvoid94|8 years ago|reply
I was under the impression it was standard operating procedure for them.
[+] [-] pers0n|8 years ago|reply
[+] [-] swiley|8 years ago|reply