Exclusive: This Is the Contract Songwriters Are Signing With Spotify

Spotify, Songwriters About to Make Good?

Sign this, and you sign away some of your rights.

Early last month, Digital Music News broke the story of a broad-reaching agreement between Spotify and music publishers to resolve tens of millions in unpaid royalties.  That agreement, forged by major publishing organization NMPA, would involve a one-time, $5 million penalty payment by Spotify as well as the construction of an interface to properly match payments back to songwriters and publishers.

Now, all of those details have been confirmed and codified into a blank contract between Spotify and individual publishers and songwriters.  That includes the $5 million fee, as well as details related to Spotify’s matching database and efforts to issue payments on unpaid, accumulated mechanical licenses.  “NMPA has been engaged in negotiations over the failure by several digital music services to license and pay songwriters and music publishers appropriately,” Israelite confirmed to DMN last month.   “I am hopeful that we can reach a just settlement that provides a framework for moving forward as business partners – as it should be.”

That agreement is now locked-and-loaded, with publishers offered a number of ways to move forward.  In an undated letter sent to member publishers and songwriters and shared with Digital Music News, the NMPA outlined the details of the ‘Spotify Pending and Unmatched Usage Agreement,’ including the $5 million, one-time fee.  “I am not excusing the decision by any interactive streaming company not to obtain the proper licenses prior to using your songs,” Israelite informed NMPA members.  “I also will not criticize copyright owners who choose to protect their property rights in any manner they see fit — they are THEIR property rights.  However I believe this settlement (and more to come) strike the proper balance.”

“First, Spotify will pay $5,000,000 on top of all of the royalties owed as a bonus pool for participating publishers.”

The agreement also gives publishers and songwriters the ability to view all of their songs, and correct any data issues to unleash payments (past and future).  But the last part will be the most controversial: the letter indicates that after a set period of time, all unclaimed royalties will be divided amongst NMPA participating publishers and songwriters, even if the royalties don’t belong to them.

“Third, any remaining royalties owed that have not been properly claimed will then be liquidated and shared with participating publishers based on each participating publisher’s Spotify market share.”

That is viewed as a direct stab against a pair of class action lawsuits being lodged against Spotify, including one initiated by longtime artist activist David Lowery (Lowery vs. Spotify USA).  That case remains ongoing, though the following contract could go a long way towards deflating the case.

 

5 Responses

    • Anonymous

      I fully agree. Artists and songwriters should be paid an hourly wage and receive 2 15min breaks per mandatory 8 hour day (unless they want a lunch break), 5 days a week. In exchange for this fair compensation, their employer (labels, publishers, etc.) retain all profits just like it works in every other industry in the world. All intellectual property will belong to the employer. Artists and songwriters will become nothing more than employees. Just like software engineers. Video game designers. Hollywood screenwriters. They will be paid a wage just like everyone else in the music industry. From janitors to label executives. And when they retire, their 401k will provide them with enough money to get their weekly groceries from the local Walmart.

      I really don’t know why the labels haven’t done this already. It would save them a shitload of money. Just imagine only having to pay Katy Perry $50-100k a year (and we will throw in a $5k yearly bonus). She would be just like those video game designers at EA making the company $ billions. Fairly compensated for her work.

      Reply
      • Chris Castle

        The “labels haven’t done this already” because they don’t get to decide. We fought a civil war about this one, remember?

        Reply
  1. Claude

    “Though the NMPA agreement includes a wide range of artists, the arrangement will not cover music from the four major publishing houses owned by EMI, Universal, Warner and Sony, who all have separate licensing contracts with YouTube.”

    So why no announcement of publishers taking the Spotify shilling? Maybe majors did separate deals with Spotify like they did with YouTube and the $5 mil is chump change for the rest of the 46,000 of us.

    Reply
  2. Rick Shaw

    Nobody is forcing artists to sign this agreement or be on Spotify. It’s a choice.

    Reply

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