A new $150 million class-action lawsuit from artist activist David Lowery, the frontman for bands Cracker and Camper Van Beethoven, claims that Spotify is willfully distributing his music without mechanical publishing licenses.
The issue is one that has plagued the digital music industry since its advent. I still find it amazing that it has not been solved.
There is no, definitive clearance database for publishing rights. Anywhere in the US. And it sucks.
The US Government has created a licensing authority, called SoundExchange, that allows streaming services, with some limitations, to license the master sound recording of virtually every song available in a one-stop-shop fashion. But no such think exists for the songwriters.
To further exacerbate the issue, song copyrights routinely change hands. They are bought, sold, traded, exchanged, and shared, like chattel. One of the most famous examples was Michael Jackson purchasing the Lennon/McCartney Beatles library. But this happens everyday, and in much smaller deals. And when it happens, sometimes like a tree falling in a forest, nobody is around to hear about it. In addition, sometimes there are a dozen or more collaborators on a song. Multiply this by millions of songs over decades and it’s no wonder it is a mess.
So along comes Spotify and other music services and they want to offer all the music. So they work with the big publishing companies like Sony/ATV and Universal and Warner Chappell and Ultra and then they move on to the dozens of smaller publishers and then do a deal with Harry Fox Agency for the thousands of small publishers represented there. But ultimately there is no way to find and do a deal with every songwriter that has ever been credited on a recording.
So what is a music platform to do? Do they tell their fans they just cannot get all the music? Nah! They just put the music online, and put aside a chuck of money for the increasingly inevitable rainy day when the songwriter comes out of the woodwork and claims his rights.
Now maybe a reasonable person would notice that their music is online and contact Spotify and say “Hey, where’s my $18 you owe me for the music that got played?” And I guess they’d get a check in the mail right away. And I am sure this happens all the time.
But what if you want to grind home a point, and punish the “pirate”. The US Copyright law allows for statutory penalties of up to $30,000 for each infringed work and up to $150,000 per song for willful infringement. If Spotify knows they are infringing, which is hard to deny since they have set up a fund to pay for unlicensed music, this could get expensive.
Spotify is so frustrated with the situation, they are going to try to build a clearance database to solve the problem. They are the most recent in a long line of companies taking on this challenge. But the only way this is going to be solved is by the government stepping in. Congress needs to mandate a national copyright clearance database. If you don’t register your copyright, and you don’t get paid, then tough shit. If you do, then you can claim your $150K per song infringement penalty.
Musicians know the business, or at least they should. If you decide to retain your publishing rights, and don’t work with one of the larger publishers, that’s great. Lowery is a smart guy; he’s been a quantitive analyst and started his own publishing company. You can just imagine this has been coming for a long time. Hiding in the shadows waiting for the big payday through a class action lawsuit just reeks of greed.
On the other hand, Spotify had to know this was coming too. They’re a billion dollar company armed with lawyers whose job is to mitigate risk. Anyone in who has worked in digital music rights knows that it’s mostly a risk mitigation business. So putting these unlicensed songs up was a calculated risk by Spotify.
Ultimately the question comes down to if everyone knows the game, how should it really be played? Are the music platforms pirates, because they are knowingly putting up music that is unlicensed? Or should the copywriter holders be responsible for monetizing their work and make themselves known to (at least) the larger players in the space to collect their royalties? Leave your thoughts below in the comment section.