Settlement reached in class action lawsuit against Spotify

A settlement has been reached in a class action lawsuit against Spotify. On May 26th, the plaintiffs in Ferrick v. Spotify USA Inc., No. 1:16-cv-8412 (AJN) contend that Spotify made certain musical compositions available on its service without a license. Spotify denies any wrongdoing, but the parties have agreed to a settlement to avoid the uncertainties and expenses associated with further litigation of the case. The Court has not decided whether the plaintiffs or Spotify is right.

The settlement could see many songwriters receiving benefits. Anyone who owns a copyright that has been registered with the U.S. Copyright Office (or for which an application of registration has been filed) for a musical composition that was made available on Spotify’s service for interactive streaming and/or limited downloading between December 28, 2012 and June 29, 2017, and contends that Spotify did so without a license, may be eligible to receive benefits.

If the court approves the settlement, Spotify will pay $43.45 million into a Settlement Fund; pay all Settlement Administration Costs and Notice Costs, which the Settlement Administrator has estimated will exceed $1 million; pay mechanical license royalties calculated in accordance with 37 C.F.R. §§ 385.10-17 for future use of musical compositions; establish a Mechanical Licensing Committee that would aim to increase the percentage of tracks available on Spotify’s service that can be matched to a registered copyright owner; and coordinate industry efforts to share publisher catalog data to facilitate the mechanical licensing of content on streaming services and digitize pre-1978 Copyright Records and make them available online for free use by the public.

Authorized claimants who file a claim within 210 days of the settlement’s start date of May 26, 2017 will receive a minimum pro rata payment from a fixed portion of the net settlement fund. Depending upon the number of streams of their qualifying musical compositions (through the preliminary approval date), claimants will also receive a pro rata share of the net settlement fund determined by dividing the total number of streams of their qualifying musical compositions by the total number of streams of all qualifying musical compositions. Claimants will also receive payment of future mechanical royalties calculated using the statutory rate. Spotify will also provide non-monetary benefits to class members, such as by taking steps to facilitate payment of royalties for unmatched works.

Scott Borchetta talks to Nikki Sixx about Taylor Swift and Spotify

A decision is expected on December 1st at 10 am at the U.S. District Court for the Southern District of New York. Objections and exclusions will be accepted until September 12th.

Many artists such as Taylor Swift, Jason Aldean and Def Leppard have pulled their music from Spotify due to unfair practices. Big Machine Label Group Founder, Scott Borchetta, who has Swift on their roster, says Spotify controls what they do with the music they stream.

“The problem we have with Spotify is that they don’t allow you to do anything with your music,” he tells Nikki Sixx during a radio interview in 2014. “They take it and they say, ‘We’re gonna put it everywhere we want to put it and we really don’t care about what you want to do. Give us everything you have and we’re going to do what we want with it’, and that doesn’t work for us.”

“I love what Taylor Swift has done [i.e. keeping her music off of Spotify],” states Def Leppard guitarist Phil Collen. “I have a friend who is a songwriter, and he had a song that got over a million plays on Spotify, and he received 12 pounds, about $18-$19. That really sums it up. It’s bad, if not worse, than the whole Napster thing and downloading when it started.”

Author: Buddy Iahn

Buddy Iahn founded The Music Universe when he decided to juxtapose his love of web design and music. As a lifelong drummer, he decided to take a hiatus from playing music to report it. The website began as a fun project in 2013 to one of the top independent news sites.