Could Spotify face $100 million-plus lawsuits over its comedy album faux pas?

Kevin Hart albums have been pulled from Spotify in the past fortnight, alongside a host of other comedians' work

Welcome to the latest episode of Talking Trends, the weekly podcast from Music Business Worldwide – where we go deep behind the headlines of news stories affecting the entertainment industry. Talking Trends is supported by Voly Music.

This week on Talking Trends, MBW founder, Tim Ingham, explains why Spotify deleted a swathe of comedy albums from its service over the Thanksgiving weekend – and why it might be at the mercy of big-money lawsuits in the weeks and months ahead.

Ingham explains that two prominent companies now operating in the world of comedy royalty collection and administration – Word Collections and Spoken Giants – are each respectively run by two music industry veterans who are experts in the intricacies of licensing in the US: Jeff Price (Word Collections), the founder of Audiam and TuneCore; and Jim King (Spoken Giants), a former senior figure at US collection society BMI.

Spotify has suddenly removed comedy albums by stand-ups ranging from Kevin Hart to Tiffany Haddish, Jim Segura and Robin Williams – as Jim King accuses the streaming company of knowing “they don’t have all the rights in place to serve this content”.

That’s a reference to the rights to the underlying lyrical content of each piece of performed stand-up. Spotify has the licenses to the recordings, but possibly not this underlying right – the equivalent of the publishing right in music.

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In music, such rights are now covered by the Mechanical Licensing Collective (MLC) in the United States, ensuring that Spotify has cleared rights to every song on its platform from the get-go.

But this wasn’t always the case: In 2016, Spotify was sued by songwriters such as Melissa Ferrick and David Lowery for hundreds of millions of dollars in damages, having allegedly not obtained the mechanical licenses required to host their music. (Spotify eventually settled in a class action case against these and other songwriters, via a $43 million fund.)

Comedy routines are not currently covered by the MLC.

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On Talking Trends, Ingham wonders aloud if Price and King may have spotted an “opportunity” or “injustice” to discuss a similar settlement with Spotify for these analogous rights in comedy.

If a party could prove “wilful copyright infringement” by Spotify on this score, Ingham notes, the streaming company could be on the hook for up to $150,000 in damages for every comedy ‘track’ infringed.

Says Ingham: “The fact that Jeff Price has been able to raise $3.5 million in investment for Word Collections in the in the past few weeks doesn’t surprise me. Maybe opportunity knocks here, and his investors can see that.”

Ingham further suggests that this story could have ramifications for Spotify far beyond comedy: “Jim King’s company [Spoken Giants] defines itself as representing rightsholders who make spoken word content – not just comedy content. And spoken word content, whether that’s podcasts or the more obvious analogous world of audiobooks, is a big part of Daniel Ek‘s future strategy for Spotify.

“Just the other week, Spotify revealed it was buying the audiobooks platform Findaway to challenge companies like Amazon‘s Audible in the audiobook space. It would be no great surprise to me if the likes of Jeff Price, Jim King, and others are now questioning if Spotify actually has all the licenses it needs for audiobooks in the United States, as well as comedy.”

You can listen to MBW ‘s latest Talking Trends Podcast above or via this link.

Companies mentioned in this week’s episode of Talking Trends include: ASCP, BMI, the MLC, SESAC, Spoken Giants, Spotify, Word Collections.

People mentioned in this week’s episode of Talking Trends include: Daniel Ek, Jeff Price, Jim King.