When Spotify recently upped prices for its subscriptions by a dollar in the US, nobody really anticipated that it would be to the immense detriment of songwriters. I suppose we should've guessed.
Last week, Billboard estimated that, with the streaming giant claiming that its new bundling of audiobook content into its premium, family and duo plans qualifies it for a discounted royalty rate due to paying for licensing both music and books, Spotify would pay songwriters about $150 million less next year.
In a follow-up report, the National Music Publishers' Association (NMPA) told the publication that the change was "potentially unlawful." Sure enough, while it pertains to a separate issue, the trade association has now issued a cease-and-desist letter to Spotify for its alleged hosting of unlicensed lyric, music video and podcast content — which Billboard reports might be a retaliatory move.
"Spotify appears to be engaged in direct infringement by hosting unlicensed musical works in its lyrics, videos and podcasts and by distributing unauthorized reproductions, synchronizations, displays and derivative uses of these musical works to its users," reads the letter penned by NMPA's executive VP and general counsel Danielle Aguirre, despite not naming any specific unlicensed works or giving an estimate of the number of alleged infringements. (If the organization proceeds to file a lawsuit against Spotify over these offences, more detail will be required.)
A spokesperson for Spotify responded, writing, "This letter is a press stunt filled with false and misleading claims. It's an attempt to deflect from the Phono IV deal that the NMPA agreed to and celebrated back in 2022. We paid a record amount to benefit songwriters in 2023, and we are on track to exceed this amount [globally] in 2024. Spotify is a platform for licensed content. We are committed to the integrity of our platform, and we have a clear process in place for rightsholders to contact Spotify about any content they believe is unlicensed."
Numerous music publishers have licenses directly with Spotify for lyric and video content, differing from the government-regulated process of setting mechanical royalty rates in the US — although sometimes, for lyrics specifically, licensing deals are made through third-party aggregators such as Musixmatch. A source close to the matter told Billboard that these agreements, typically lasting for a year or two, are not major sources of revenue for publishers nor streaming services.