Spotify and NMPA Agree on $30 Million Settlement for Unpaid Royalties

There’s been a lot of buzz in the streaming music industry lately. Early this month Facebook and Spotify announced a sharing feature within the Facebook app, Soundcloud hired a new CRO, Apple announced they will be able to hold unlicensed remixes, bootlegs, and mash-ups, and now Spotify has to pay the National Music Publishing Association (NMPA) $30 million dollars in unmatched(songs that haven’t received payment because Spotify didn’t identify their publishers) and unpaid song royalties.

Approximately $25 million will be allocated toward publishers who claim and prove “ownership of songs in the unpaid and unmatched pool of songs,” and will be paid “their share from actual plays of those songs”; the remaining approximately $5 million will go toward publishers “based on each publisher’s estimated market share as calculated by the NMPA.”

“As we have said many times, we have always been committed to paying songwriters and publishers every penny,” Spotify global head of communications and public policy Jonathan Prince said in a statement. “We appreciate the hard work of everyone at theNMPA to secure this agreement and we look forward to further collaboration with them as we build a comprehensive publishing administration system.”

“NMPA’s goal has always been to ensure publishers and songwriters receive the money they deserve,” NMPA president and CEO David israelite said in a statement. “I am thrilled that through this agreement both independent and major publishers and songwriters will be able to get what is owed to them. We must continue to push digital services to properly pay for the musical works that fuel their businesses and after much work together, we have found a way for Spotify to quickly get royalties to the right people. I look forward to all NMPA members being paid what they are owed, and I am excited about the creation of a better process moving forward.”

As much as this sucks for Spotify to dish out $30 million, it’s a good sign because it shows that Spotify is trying to work on the relationship from themselves to the listener. As Billboard reports, “The settlement also provides a path to direct licensing between Spotify and publishers, with the goal of strengthening business relationships, according to the announcement.”

Source: Billboard