TIDAL has been hit with a $5m class action lawsuit for allegedly failing to register – and pay – mechanical royalties to an artist in the US.
The lawsuit has been filed in the New York Eastern District Court by John Emanuele, who plays in the band American Dollar, as well as Yesh Music Publishing.
It claims that TIDAL failed to serve appropriate Notices Of Intent to obtain a licence to 148 musical recordings on its service from the plaintiffs – drawn from 118 copyrighted compositions.
In addition to the mechanical royalties issue, which echoes two lawsuits filed against Spotify in the past three months, Emanuele/Yesh’s suit claims that the artist has not been paid other due royalties from either the WiMP or TIDAL streaming services.
Emanuele and Yesh accuse TIDAL of a “calculated business plan to avoid the costs associated with properly serving NOIs, and to retain royalties for which they have no right”.
More damning than the NOI issue, though, is Emanuele and Yesh’s accusation of under-payment of royalties.
Reads the lawsuit: “Defendants’ systematic underpayment of royalties was done in several ways.
“[TIDAL] has a calculated business plan to avoid the costs associated with properly serving NOIS.”
“First, Defendants deliberately miscalculating the per-stream royalty rates by including millions of streams Defendants do not pay royalties in the calculation. This diluted the paid per-stream rate for royalty payments by up to 35%
“Next Defendants systematically undercut the calculation of mechanical royalties to Plaintiff and the Putative Class by illegal deals with equity investor partners.
“Finally, Defendants failed to serve monthly detailed reports as required by the statute.”
Their suit, which you can read through here, also names TIDAL owner Shawn Carter (Jay Z) personally.
It reads: “Ironically, when Defendant Carter purchased the TIDAL Music Service in 2015, it claimed it would be the first streaming service to pay the artists. Different owner, same game.”
It claims: “Defendants are liable for their intentional infringement of each of the 118 registrations in the amount of $150,000 per registration, but in no case less than $30,000 per registration and/or Defendants’ profits, attorneys’ fees, and costs.”
TIDAL has now released a statement in response to the lawsuit.
“We have removed all music associated with yesh music LLC and John Emanuele from the service.”
Said the company: “TIDAL is up to date on all royalties for the rights to the music stated in Yesh Music, LLC and John Emanuele’s claim and they are misinformed as to who, if anyone, owes royalty payments to them. As Yesh Music, LLC admits in their claim, TIDAL has the rights to the Master Recordings through its distributor Tunecore and have paid Tunecore in full for such exploitations.
“Their dispute appears to be over the mechanical licenses, which we are also up to date on payments via Harry Fox Agency our administrator of mechanical royalties.
“The main compositions in question were release by The American Dollar and their entire catalogue streamed fewer than 13,000 times on TIDAL and its predecessor over the past year. We have now removed all music associated with Yesh Music, LLC and John Emanuele from the service.
“This is the first we have heard of this dispute and Yesh Music, LLC should be engaging Harry Fox Agency if they believe they are owed the royalties claimed. They especially should not be naming S Carter Enterprises, LLC, which has nothing to do with Tidal.
“This claim serves as nothing other than a perfect example of why America needs Tort reform.”Music Business Worldwide