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Spotify denies allegations it uses 'fake' artists to cut royalty costs
Last August, Music Business Worldwide reported that Spotify placed its own music tracks into curated playlists as a way to avoid paying royalty fees on tracks the streaming company does not own. The site's sources claimed that the tracks — typically jazz, chill and mellow piano music — appear on Spotify under the names of artists who don't actually exist. Last week, Vulture brought the issue back into the spotlight, calling out two acts, Deep Watch and Enno Aare, as "fake artists" with millions of streams to their credit. Spotify denied the allegations in a statement given to Billboard a couple of days later. "We do not and have never created 'fake' artists and put them on Spotify playlists," a Spotify spokesperson told Billboard in an email. "Categorically untrue, full stop." Music Business Worldwide has jumped back into the fray to counter Spotify's rebuttal with a new post detailing its logic as well as listing 50 artists it feels aren't real.
Spotify is limiting free streaming for its own good
It's no secret that labels and artists aren't thrilled that their music is available free on ad-supported streaming services. Taylor Swift famously pulled her catalog from Spotify due to its decision to give full on-demand streaming to customers who weren't paying for a monthly subscription. And she's not the only one. The debate over streaming royalties has been going on for a while now. That's on top of the issues free options raise -- chief among them is artist compensation. When it comes to Spotify's decision to cede on free streaming, it was a matter of when, not if, this would happen to appease the labels.
Apple's idea for music royalties could stick it to Spotify
The Copyright Royalty Board, a three judge panel that sets licensing rates, is trying to figure out what the statutory rate music download and streaming services will pay publishers between 2018 and 2022. Now, the New York Times and Billboard report that Apple has a suggestion on how to figure out those rates that oh-so-coincidentally would negatively impact services with free streaming options like Spotify (heating up their back-and-forth battle) and YouTube. The statutory rate is what services pay unless they make a direct deal with a publisher, and can shape negotiations between them.
Spotify agrees to pay millions for unmatched royalties
Spotify has come an agreement with NMPA (National Music Publishers Association) over unpaid royalties for music on the streaming service that didn't have copyright owner information. According to The Verge, the company will pay $21 million.
Spotify is on the hook for $150 million in class-action suit
A class-action lawsuit filed this week claims that Spotify knowingly and willingly distributes songs without obtaining the proper, mechanical licenses, Billboard reports. The suit, filed by the band Camper Van Beethoven and Cracker frontman David Lowery on December 28th, seeks $150 million in damages. The artists launched a class-action suit because Spotify's actions affect more than 100 people, according to the complaint.
Pandora has to pay higher royalties starting in 2016
Pandora and similar services like iHeartRadio and SiriusXM will have to give a bigger part of their earnings to music labels starting January 1st next year. The Copyright Royalty Board has ruled that online radio stations have to pay labels 17 cents per 100 song plays by non-subscribers and 22 cents per 100 plays by subscribers. Pandora's rate used to begin at 14 cents per 100 plays, and even then it was never profitable -- in fact, it had to pay over $400 million in royalties in 2014, which was already 44 percent of its revenue.
Major UK music body sues SoundCloud over unpaid royalties
With 175 million unique listeners each month, SoundCloud has established itself as a major player in the streaming space. Despite its size, the company has faced an uphill battle to convert its huge community into customers who are willing to pay for "unprecedented access to the world's largest community of music & audio creators." SoundCloud has struck deals with some major labels and independent artists, but in the UK, the Performing Rights Society for Music (PRS) has decided to take legal action against the music sharing service for allegedly not paying artists the royalties they deserve.
Taylor Swift slams Apple for skimping on Music royalties during trials
Taylor Swift isn't just miffed at Spotify for its low payouts to musicians... she has a beef with Apple, too. The pop star has written an open letter saying that Apple Music won't get her latest album, 1989, because the service isn't paying artists or producers during subscribers' 3-month trial period. According to Swift, it's not about her own cut. She's more concerned about the "young songwriter" who's counting on that first single to stay afloat. While she's a fan of Apple steering listeners toward paid streaming, she doesn't think that it's fair to ask people to "work for nothing," especially when the iPhone maker has plenty of spare change to spend.
