Deezer, Rhapsody Protecting Their Asses Against $200 Million Spotify Lawsuit

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As the ugly, initial back-and-forth gets started on $200 million class action between Spotify and songwriters, rival streaming services Deezer and Rhapsody are taking steps to protect against future liabilities.  The Harry Fox Agency, or HFA, is also assisting in the administration of mechanical licenses dating back to 2005 in the wake of the lawsuit.

The first move is coming from Deezer, which has now taken the strong step of preemptively removing Lowery’s catalog from their global stores.  According to confidential, internal emails shared this week with Digital Music News, Deezer has opted to proactively remove works from Camper van Beethoven and Cracker worldwide, both bands fronted by Lowery.

The step is unusual given that Deezer is not even present in the United States, where the litigation is based.  Instead, Deezer’s model involves a broad swath of non-US stores, coupled with larger markets like France (the service is HQ’d in Paris).  In that light, the Deezer takedowns suggest fear that the litigation will spread beyond US borders, especially with such a massive songwriter class potentially assembling.

Spotify, for its part, has only removed Lowery’s catalog on its US store, according to a separate email (also leaked to DMN) from Spotify executive Steve Savoca to multiple Universal Music Group executives.  “This only affects the US,” the email stated.  “The catalogue will remain live elsewhere.”

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Rhapsody, a longtime streaming music service that finds itself far behind Spotify, is now taking steps to cover its liabilities.  The root of Lowery’s class action lawsuit is the failure to properly pay mechanical licenses on streams, a process that begins with an ‘NOI,’ or Notice of Intention.  Harry Fox Agency (HFA) administers mechanical licenses, and is now distributing NOIs to Lowery dating back to 2005, as confirmed by the above document shared this week with Digital Music News.

Meanwhile, Spotify itself is battling the class action lawsuit head-on, first by moving to strike the entire lawsuit on procedural grounds.  Ironically, Spotify law firm Mayer Brown LLC is now arguing that the complexity of rights licensing makes it impossible to aggregate songwriters into a group.  There are just too many uniquely complicated cases to make a class action applicable, according to the argument.

 

Updated, 4 pm PT: Our earlier report indicated that LyricFind was ripping down Lowery’s content, though that has been contested by LyricFind CEO Darryl Ballantyne.  “Everything of [Lowery’s] that is up we have a valid license for; anything that is not we’ve never had up,” Ballantyne texted DMN.  The report has been updated and corrected.

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11 Responses

  1. Jeff Robinson

    Our artists/songwriters/publishers have never received a single NOI from Rhapsody, but have been paid songwriting royalties. How can a service like that only pay BMI but NOT the publisher of the material!?

    Reply
    • Casey - Furure of Music Coalition

      Because the PROs are only licensing the performance layer, and the interactive services obtain blanket licenses to perform those musical works on a repertoire, not song-by-song basis (which US law does not permit for mechanical licenses). Also, ASCAP and BMI have solid–though not machine readable or bulk searchable–data sets on publishers. HFA’s publicly searchable system, Songfile, is less useful for large catalog ownership identification, and there is no standard identifier or IPI to allow for mapping to external data sets.

      We have a colossal data management problem that is now threatening to cripple even the parts of the legitimate digital marketplace that show promise. Until this is resolved, with ALL parties committing in good faith to deploy uniform standards and participate in accessible data storehouses, we will never right the ship.

      I know it’s a tough nut to crack, and that incentives haven’t been aligned even within the same industry, but we are officially now at the point that the money left on the table exceeds the money made from black box skimming (unattributable income divvied up by market share as a matter of policy or via lump sum settlement distribution).

      Our board members and allies–all deeply devoted and unimpeachable experts–are working on solutions. Saving the industry from itself is not a sexy activity, but if we want to have a world where a diverse array of music can be accessed via legal means, where EVERY party who needs to be paid is paid, there needs to be a True North to power through the morass of finger-pointing, recalcitrance, opportunism, ineptitude and fear-mongering.

      If anyone has the desire to roll up their sleeves and fix this once and for all, we want YOU.

      Reply
      • Jeff Robinson

        Casey, specifically, the NOIs our artists have received have come through Music Reports. To clear things up might mean finding out of they handle ALL digital services or only a few and HFA picks up the slack on the others. Having competing systems dealing with exactly the same client base might make this awkward, but it is not clear if HFA and Music Reports overlap or not. This SHOULD NOT be a mystery to artists and songwriters.

        Reply
      • Paul Resnikoff
        Paul Resnikoff

        ” we are officially now at the point that the money left on the table exceeds the money made from black box skimming”

        Can you break this down further? I’d like to learn more about ‘black box’ money that is taken and not properly distributed.

        Reply
  2. Darryl Ballantyne

    Hey, Darryl from LyricFind here. This story is completely inaccurate in regards to us. We are not pulling down any of Lowery’s content and we do not use any lyrics without a valid license.

    Paul, I tried calling both your office and cell numbers. Please issue a correction in this article and in the future, if you’re going to publish fantastical claims about us, at least call to verify them first.

    Reply
  3. Anonymous

    Deezer is live in the US. They have service available through partners like Sonos and they bought Muve Music which I am assuming still exists in one form or another. Why they are playing theses games and denying the general public access is anyone’s best guess. They have had more than enough time to come up with the necessary licenses.

    Reply
  4. Manny Sheehan

    “Any person who wishes to obtain a compulsory license under this section shall, before or within thirty days after making, and before distributing any phonorecords of the work, serve notice of intention to do so on the copyright owner.” How can HFA send a notice under the compulsory license backdated to 2005!?! The CFO didn’t even start working at Rhapsody until 2013 according to his Linkedin. Looks like an ass covering scam.

    Reply
    • Casey - Future of Music Coalition

      Yes, this is still in violation of the terms set out in S. 115.

      A negotiated mechanical can still be obtained, but there is no backdating NOIs. Actually, the NOI itself is a covenant in lieu of identification if sent tot the Copyright Office, which apparently also hasn’t happened for many of the works alleged to not have proper licenses.

      Reply

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