Findaway and Corporate Rights Grabs

From Kristine Kathryn Rusch:

I know many of you have asked me to write about Findaway’s giant rights grab this week. I just finished a short post on it. I’m no longer doing the regular business blog. Instead, I post about business things on my Patreon page. I made this post wide, so everyone can see it, but most posts will not be.

. . . .

A lot of you have written to me, asking me to write a bit about Findaway’s rights grab. I think those of you who wrote knew what I was going to say.

For those of you who aren’t aware of what’s going on with Findaway, I’m going to give you the quick & dirty and then a bit of context.

. . . .

Anyway…on Thursday, February 15, they posted a new Terms of Service that would go live on March 15. It said:

Accordingly, you hereby grant Spotify a non-exclusive, transferable,  sublicensable, royalty-free, fully paid, irrevocable, worldwide license  to reproduce, make available, perform and display, translate, modify,  create derivative works from (such as transcripts of User Content),  distribute, and otherwise use any such User Content through any medium,  whether alone or in combination with other Content or materials, in any  manner and by any means, method or technology, whether now known or  hereafter created, in connection with the Service, the promotion,  advertising or marketing of the Service, and the operation of Spotify’s  (and its successors’ and affiliates’) business, including for systems  and products management, improvement and development, testing, training,  modeling and implementation in connection with the Spotify Service.  Where applicable and to the extent permitted under applicable law, you  also agree to waive, and not to enforce, any “moral rights” or  equivalent rights, such as your right to object to derogatory treatment  of such User Content. Nothing in these Terms prohibits any use of User  Content by Spotify that may be taken without a license.

I was going to underline the egregious parts, but it’s all egregious.

It sparked an immediate and forceful backlash.

Today when I went to look at the TOS, it had changed. It now says: 

Accordingly, and without limiting any payment obligations under Section 5  herein, you hereby grant Spotify a non-exclusive, worldwide license to  reproduce, make available, perform, display, distribute, and otherwise  use your User Content on and in connection with the Spotify Service and  the Distribution Services (as defined in Section 5). This license  permits the use of the User Content by Spotify for systems and product  management and development, testing, training, modeling, and  implementation in connection with anti-piracy and anti-fraud measures  and the discoverability, promotion, marketing, curation, distribution,  and sale (or developing the user experience in connection therewith) of  the User Content and the Spotify Service. Spotify’s distribution  partners also have the right to distribute your User Content via the  Distribution Services, subject to your right to discontinue distribution  as described below in this Section 4 and/or to opt out from particular  Distribution Partners as described in Section 5. For the sake of  clarity, these Terms do not authorize Spotify to use User Content to  create a new book, ebook or audiobook, or to use User Content to create a  new, machine-generated voice without your permission.

Note that some of the terrible language is gone, such as waiving moral rights and the creating of derivative works. It still will let them use your product to train AI though and other stuff, but to my surprise and their credit, they did change their TOS.

Does that mean that after next week, you will find my work on Findaway? Um, no. You will not. As a friend of mine said, they’ve shown their true colors. Musicians have had trouble with Spotify for years and these are Spotify-inspired changes.

Spotify bought Findaway in 2022, paying about $123 million dollars. At the time, Spotify CEO, Daniel Ek, told investors that he was “confident that audiobooks will deliver the kind of earnings that  investors are looking for, with profit margins north of 40 percent.” 

Over the past 18 months or so, Spotify has tinkered with Findaway in a variety of ways, mostly to do with the way that they’re paying content providers. Then this new TOS rights grab, which is not unexpected. In fact, it’s right on time.

Remember, what Spotify wants to do with Findaway and Anchor and all of the other services it is buying is increase profit margins for investors. The company does not care about providing a good service for its content partners. Because this is a giant corporation which is publicly traded, it has corporate goals that have to do with investors, making big money, and profit margins. 

If Findaway does not earn the kind of money that Spotify hopes, then Findaway will be discontinued, broken off and sold, or dissolved.

In other words, don’t expect that lovely tiny company that started in indie audiobook distribution to ever return.

Link to the rest at Kristine Kathryn Rusch

PG has signed up for access to The Patreon Site Kris set up on January 1 of this year because he likes the style and insights he finds in her essays on a regular basis.

Kris has also structured her Patreon membership costs in a savvy manner. Memberships start at $1.00 per month. There are steps up from that fee, but she includes a lot of interesting resources in the basic tier.

PG has shied away from any number of Patreon offerings that start at $100 per year and go up from there. That price may seem reasonable to some, but, for PG, that large an ask requires a lot more work than he suspects more than a few expensive Patreonistas will be willing to devote to their sites.

3 thoughts on “Findaway and Corporate Rights Grabs”

  1. Felix, I tongue-in-cheek disagree with you: When handled “properly” (which is to say with borderline legal ethics — from the wrong side of that border), Title 11 of the United States Code is a magic bullet. Just ask General Motors. And Chrysler.

  2. 1- As PG often says: “Don’t do business with jerks.”

    2- Middlemen will always try to get the biggest chunk of revenue in the pipeline.

    3- There is no magic bullet in any business.

  3. The company does not care about providing a good service for its content partners.

    Content partners? I think the more accurate term is “suppliers.” These companies do not think of the suppliers as partners in any way. Nor should the suppliers think of the buyers as anything but buyers. (Remember the folks who kept expecting publishers to nurture authors?)

    “Partners” began seeping into the consultant slides in the late Eighties. A supplier who thinks he is a partner will be very disappointed.

    And yes, corporations do act in the best interests of their owners. Likewise, suppliers act in their own best interests. Ever hear an author say they are nurturing Amazon?

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