“We’re saying that labels aren’t even allowed to give out this digital content to begin with. So we want our music deleted, from every streaming platform. That way, we can start from scratch and start re-negotiating and see where it lands.”
Per Herrey, attorney for the Swedish Musicians’ Union.
Even Thom Yorke can’t pull his old Radiohead classics from Spotify, because the label has those rights. But what if that isn’t quite true? That’s the question now being tested by Per Herrey and the Swedish Musicians’ Union, Svenska Musikerförbundet. The threatened lawsuits, first reported by Sveriges Radio in Stockholm, allege that labels are not only screwing artists, but extending digital streaming rights that they simply don’t have.
Of course, Spotify asserts that they can’t be screwing artists because they ‘pay the labels’. Which is why labels are the target: Herrey points to possible legal action against Universal Music Group and Warner Music Group, both majors that have received massive advances and equity shares from Spotify while passing little on to artists.
Herrey estimates that artists capture between 6 to 10 percent of revenues received from companies like Spotify. “You can’t live on that,” Herrey relayed.
“If you compare that to radio, where the split is 50/50 between labels, artists and musicians, there’s no comparison.”
The origin of the outrage is telling: Sweden is widely regarded as a model country for streaming and access, thanks to massive adoption and recovering recording revenues. The threatened suits suggest that not everyone is celebrating or, more importantly, enjoying the early spoils.
Regardless of the locale, the issue comes ahead of very difficult juncture for Spotify. Mega-artists like Thom Yorke continue to raise uncomfortable questions about paltry payouts, but more perilous questions are dangling on the financial side. Recent financial figures show an unsustainable level of cash burn at Spotify, and potentially serious problems attracting more capital as a result. And after burning through hundreds of millions of dollars, Spotify is getting dangerously close to depleting its funding tranche.
It’s unclear which artists would drive the suit, though labels could be over-extending their rights on older contracts. That’s currently a massive problem for major labels in the US, thanks to a momentous decision involving original Eminem publisher F.B.T. Productions.
More as it develops. Written while listening to Arcade Fire’s purposely-leaked album, Reflektor.