From Music Business Worldwide:
If you hadn’t noticed, tensions between the music publishing community and Spotify have taken a turn for the sour in recent months.
This all began in March when Spotify, alongside other music streaming operators like SiriusXM/Pandora, Google and Amazon, lodged an appeal against mandated pay rises for songwriters and publishers in the US.
The headline news about that pay rise, decided by the US Copyright Royalty Board, was that mechanical streaming payouts from the likes of Spotify would rise by 44% or more between 2018 and 2022.
It turns out, however, that there was some additional and under-reported complexity to the CRB decision concerning Spotify’s student discount offers and its family plan bundles – which allow up to six family members to stream Premium Spotify for a single price of just $14.99 a month.
“According to the new CRB regulations, we overpaid most publishers in 2018… rather than collect the 2018 overpayment immediately, we have offered to extend the recoupment period through the end of 2019.”
Spotify spokesperson
Because of this additional complexity, Spotify has now calculated that, retrospectively, according to the CRB decision, many music publishers actually owe it money for 2018, due to an overpayment based on the prior rates. And guess what? It wants that money back.
Spotify told the publishers the news this week and, as you can imagine, these companies – already up in arms over Spotify’s CRB appeal – are fuming about it.
One senior figure in the music publishing industry told MBW: “Spotify is clawing back millions of dollars from publishers in the US based on the new CRB rates that favor the DSPs, while appealing the [wider CRB decision]. This puts some music publishers in a negative position. It’s unbelievable.”
Spotify isn’t expecting the publishers to hand over the money that it’s owed right away; instead, this negative balance will be treated as an advance by the company, which will be recouped from its 2019 royalty payouts to publishers (and, by association, their songwriters).
. . . .
David Israelite, the CEO of the National Music Publishers Association who has consistently and publicly decried Spotify’s CRB appeal, told MBW in response to Spotify’s request for reimbursement from the publishers: “I find it so hypocritical for a digital service that is appealing the CRB decision to then take advantage of the parts of that decision that benefit it. I guess we shouldn’t be surprised.”
Link to the rest at Music Business Worldwide
PG says this sounds like the behavior of an organization that holds a monopoly position in the music business.
Title reminded me of a Meat Loaf tune ‘Life’s a lemon and I want my money back’. 😉
‘Monopoly music business’… it might be if not for Apple, Amazon, CD Baby, Youtube, Facebook,Bandcamp or ReverbNation..
…or Pandora, Microsoft, or…
If it’s something the music world doesn’t lack is competition for streaming subscribers.
My impression is that as you say, for whatever reason (possibly lack of market power on the music providers side?), the streaming companies are competing for customers by giving them more songs for their money and not for content by paying the creators more. In which case the competition works out better for me than for the musicians (save that in my case most of the music I stream I already own on CD/ripped mp3 – and often on LP before that – so I’ve already paid for it more than once and streaming is just a convenience).
The reason is the per-play rates are fixed by a third party.
(at least in Pandora and Spotify cases, I assume in all.)
Also, the tech is cheap and well understood and breakeven is easy to achieve.
Most likely the studios figure if they can’t maximize per-play to their liking, they might as well maximize the audience size.
Simple solution.
If you don’t want to pay for the music–stop using it.
Simpler solution:
Calculate payments accurately.