Wait… Spotify is ‘suing songwriters’? What the heck is going on?

The songwriter community is up in arms right now… and understandably so.

Yesterday (March 7), it emerged that four major owners of digital music services – Spotify, Amazon, Google and Pandora – had lodged legal appeals against the US Copyright Royalty Board’s recent decision to raise streaming royalties for songwriters (and music publishers) by 44%.

That royalty rise, which previously looked locked in, is now in serious jeopardy.

Apple Music, in contrast, has accepted the new rates, and declined to challenge what’s viewed as an important pay hike for songwriters.

The National Music Publishers Association has led the charge for the songwriter payday, and is outraged by Spotify and Amazon’s new appeals – even accusing Daniel Ek’s company of effectively “suing songwriters”.

Here, in an exclusive MBW Podcast interview, David Israelite, President and CEO of the NMPA, explains exactly what’s going on (listen below).

So far, the NMPA has turned its guns on Spotify and Amazon, rather than Google and Pandora.

Israelite explains: “Spotify and Amazon are the bad actors; they drove the decision to appeal the [ruling]… It’s fairly clear to us that [Google and Pandora] didn’t want to to appeal, and are only doing so to protect their interests because Spotify and Amazon [objected]. So they get a pass.”

“Spotify and Amazon are the bad actors – they drove the decision to appeal the [ruling].”

Israelite, as you may expect, is full of praise for Apple’s position: “Apple is now distinguished from two of their competitors because of the way they treat their songwriter partners.

“It’s been a longstanding approach from Apple… this is the latest demonstration they respect the writers much more than their competitors do, and that will play out in a lot of different ways in how it benefits Apple going forward.”

As for Spotify, however, Israelite spares no mercy.

He slams the fact that, currently, songwriters are paid “a terribly low rate” from Spotify’s free tier, while calling on the company to drop its legal appeal entirely.

“Songwriters are important business partners to Spotify, but they’re treated instead like indentured servants,” says Israelite, referencing the platform’s current level of payouts to composers.

“It’s insulting, it’s something that I think the songwriter community is getting fed up with, and I think this may be the final straw that breaks the back of [that] relationship.”

“Songwriters are important business partners to Spotify, but they’re treated instead like indentured servants.”

Yesterday, Spotify – in a joint statement with Pandora and Google – claimed that the CRB’s royalty rate rise decision “harms both music licensees and copyright owners”.

Israelite reserves particular ire for that phrasing.

He says: “I’m not sure I have ever seen a more patronizing and arrogant quote than the suggestion that somehow a decision which raises the rates of songwriters by 44% harms ‘copyright owners’ – ie. songwriters. It is insulting that they [would suggest] this decision was bad for songwriters.”

Adds Israelite: “Spotify [recently] engaged in a PR campaign to make nice with the songwriter community. They would throw parties, put up billboards and they started the ‘Secret Genius’ program – as if somehow it was a secret that these were great songwriters – giving awards and honoring very talented [people].

“Every penny spent on that effort has gone to waste. I can promise you that no-one in the songwriting community is going to believe that Spotify cares, at all, about songwriters after taking this action.”

“No-one in the songwriting community is going to believe that Spotify cares, at all, about songwriters after taking this action.”

Spotify fell out very publicly with Warner/Chappell in India last week, ostensibly over the latter company trying to push up royalty rates for songwriters in the territory.

Rather than agreeing a direct deal with Warner Music Group, Spotify instead attempted to use a statutory license in the region – typically designed for radio broadcasters – to avoid the need to strike a one-on-one agreement.

“That decision of how Spotify treated songwriters in India and in many other situations… is all being tied together by this most recent action of appealing the rate decision,” says Israelite.

“This is a company that doesn’t respect its songwriter partners and that manifests itself in many different ways.”

He now predicts that a noisy revolution is brewing against Spotify and Amazon from the songwriting community.

“These companies have shown their true colors,” says Israelite.

“They don’t respect songwriters, they are attacking songwriters to try to cut what they pay them. It’s time for everybody to rise up and say: enough.”Music Business Worldwide

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