Spotify will pay out $112m following a settlement agreement from a lawsuit claiming that songwriters on the app hadn’t been paid enough in royalties.
The lawsuit originated from David Lowery, a musician’s rights advocate and Melissa Ferrick songwriter and owner of multiple record labels. In the suit, Spotify were accused of failing to obtain proper licences to songwriters’ but still proceeding to use them on their platform. $43.5 million will go to all the artists and labels that could have been affected by the problem and the other $80m will go to paying ongoing royalties and other fees.
Wixen publishing, who represents such artists as Tom Petty and River Coumo, said that the settlement was “substantively unfair” as it believes that Spotify managed to get a 98.7% discount on the total amount of money they could have had to pay out as well as escaping infringement accusations and punishments.
Other artists are also concerned that the suit won’t change the low royalty rates paid to artists by Spotify and other streaming companies. Spotify pay out $0.00066481 per stream. In 150,419 streams an artist would make only $100 from the premium tier. This number of streams triples for the ad-supported streams. Such artists like Taylor Swift have refused to put themselves and their music on Spotify in protest of the low rates paid.
