While there is a long line of people taking swipes at Spotify (Thom Yorke, David Byrne, et al.), David Lowery — the guy from Camper van Beethoven and Cracker, mathematician, and lecturer of music business at University of Georgia — has actually stepped up to do something about his unease with the music-streaming giant by filing a class action against the company.
As Billboard reports, Lowery filed a $150 million class action against Spotify on December 28 seeking compensation on behalf of artists for copyright violation and the non-payment of mechanical royalties, which was soon followed up by another class action filed on behalf of Gradstein & Marzanno.
Apparently, Spotify itself has been aware of this problem for awhile, which stems from the fact that the mechanical royalties (which is payment each time a song is played) were traditionally distributed by labels, but now with all this digital disruption, the job of tracking who plays what and when, including who gets paid for that and how, has become a tricky task that the industry has avoided for awhile. Billboard reports how the cure for this mechanical royalties glitch could be purposefully withheld by the major labels as a way to leverage a bigger piece of the streaming pie back onto their plate:
A major issue in negotiations between Spotify and the three majors is the service’s free tier, which pays one-seventh as much per stream as its paid tier. Some would like to see the free tier eliminated; others say they will work with the free tier, but will demand a bigger minimum payment this round.
“These lawsuits… increase negotiating leverage over rates on the free tier,” says one major label executive. Another executive counters that Spotify’s leverage increases with its revenue, which continues to rise.
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