Earlier this week, Spotify’s contract with Sony Music Entertainment was leaked, creating one of the biggest and most important stories of the year for the music and tech industries.
So why aren’t the biggest and most important publications — including Billboard, the New York Times, the Wall Street Journal, TechCrunch, Business Insider, Forbes, and Rolling Stone — even mentioning it?
The answer, according to a pair of sources with knowledge of the matter, is that Spotify executives have been been going to ‘great extremes’ to prevent coverage of the leaked contract in some of the the largest media outlets. “[They are] using whatever tactics, dangling threats or just making publishers scared,” one source flatly told Digital Music News.
“Just ask yourself why Billboard hasn’t even mentioned it.”
Neither source disclosed which specific publications were being singled out, or if the list was expanding.
Sony lawyers may also be spearheading a thinly-veiled threat campaign. The mega-corporation has already sent a threatening letter to Digital Music News over previous coverage of an internal Sony email, one that detailed an exchange between Sony Music executives that revealed a large equity stake in Spotify. Sony Music Entertainment were responding to a spoof, April Fools article about a $4.1 billion acquisition by Google (that of course never happened).
Meanwhile, a total of just 30 publications have made reference to the contract (according to Google News), though Digital Music News is among the largest of that set.
And just so you know where we stand on this, here’s the entire contract between Sony Music Entertainment and Spotify for your review.
The Verge was the first to leak the contract.
If I were Spotify I’d try to hide it, too.
This is really, really going to hurt them.
How’s it going to hurt them? Worst it’s gonna do is piss off artists. Everyone hates artists. It’ll have no impact on Spotify OR Sony whatsoever. They’re like the Nestle of the music biz. A handful of people will post finger-wagging facebook posts about them, and they’ll just go on doing their thing. As long as the music stays free – nothing to see here.
“Worst it’s gonna do is piss off artists”
Exactly — Spotify exists as long as artists want it to exist.
It is dead without artists.
Yea, and yet I still haven’t seen DMN with the big headline, “Thousands of Artists Pull Out of Spotify in Response to Sony Contract Story!” And I’m guessing I won’t be seeing it either… In fact I’m guessing the long weekend will erase the story from people’s minds completely and it’s never spoken of again.
Well, a fella can dream. 🙂
You think it’s just a dream? 🙂
Reminds of Hypebot’s top story today:
Gangnam Style earned an estimated
$4,600,000 — from commercial deals
$4,000,000 — from YouTube ads
$3,900,000 — from digital downloads
$50,000 — from on-demand-streaming
…I should mention that Gangnam Style is the exception:
YouTube revenues for other top hits are almost as non-existent as streaming revenues in general, compared to digital downloads.
“Sony Music Entertainment were responding to a spoof, April Fools article about a $4.1 billion acquisition by Google”
Perhaps because the article wasn’t published on April 1…
Actually, it was published on April 1st, 2014 😉
OK, I got it confused with your little 2015 event — my bad.
In Billboard’s defence, Billboard did in fact post an article (with a photo of Kelly Clarkson) yesterday entitled:
“Fight Over Sony Music’s Streaming Income May Be Headed to Appeals Court By Eriq Gardner, The Hollywood Reporter[,] May 19, 2015 [at] 11:02 PM EDT[.]”
The article mentioned the leaked contract between Sony and Spotify, how Sony got a $25 million advance for the first two years under the contract, whether the money is being put into the pot for artists or being kept by Sony without being shared, as well as that Sony also has most favored nation clauses, among other things.
You mean buried at the end of some syndicated article? That’s barely anything but a token way to just say “we included it”!
No, I meant that Billboard did in fact post an article.
I read it first over at David Lowery’s site citing Verge. And he speculates that Spotify leaked it intentionally. He makes an interesting argument
“he speculates that Spotify leaked it intentionally”
Well, he’s no fool but I really, really doubt that! 🙂
True, he does point out that with a little more investigation it shouldn’t be too hard to find the source
I hope the captcha is working……
Exactly how does Spotify threaten those newspapers?
Where can I find the actual contract? Any working link?
BTW why is this called a distribution agreement (opposed to license)?
Link to the contract is dead : )
Or … these are reputable new organizations (unlikes others with “News” in their name) and before they post any old leaked contract they look into the validity, legality of posting, etc.
Re: “legality of posting”
Should in most cases be easily answered with “yes”. Even in case of state secrets, usually only the original leaker (as in Chelsea Manning) is liable for the leak.
Maybe it isn’t getting much publicity because there isn’t anything very striking in the contract. As David Lowery has pointed out, the size of the advances is reasonable in relation to the expected level of usage. The ‘most favored nation’ clause is also a fairly widespread provision in commercial contracts, and not obviously unreasonable. The only mystery is why Sony and/or Spotify were so anxious to keep the terms secret.
Does anyone have a copy or link to full contract? It’s been taken down from every site. I knew I should have printed this out yesterday.
You know why Spotify doesn’t want it leaked? Because Sony doesn’t want it leaked.
Why doesn’t Sony want it leaked?
1. Sony eagerly signed uo for those “low” rotatable rates. Shows that Sony agreed to the rates that artists villify Spotify for. Same thing I’ve been saying for years. Blame the label not the streaming service for your small payouts.
2. Sony made a lot of money. Where did the tens of millions that Spotify paid up front go? Lining Sony’s pockets. How much of that went to the artists?
3. Equity. This one may even piss me off the most if I was an artist. Such a conflict of interest. It is in Sony’s best interest to have Spotify grow and to NOT have higher payouts to the artists so Spotify’s bottom line grows so that the equity is worth more.
So everyone that has been vilifying Spotify’s payouts should point their fingers directly at the labels. Artist, you are the ones that signed these deals.
Some of the folks vilifying Spotify are independent labels and independent artists who are willing to share their books that show they are getting miniscule payouts.
Indeed.
Another opportunity to point out that these low rates are affecting indies and unsigned artists who have no major label affiliation.
Two to Tango, Spotify agreed to this deal, even if under duress. They are also responsible to these points of complaint.
Major artists – point your grievances to your label and the deal you signed
Indy label/indy artists – get off Spotify and sell your product direct to the public and stop the bitching
The end
And Indie labels?
We just had major artists start their own streaming service.
Many artists sell direct. And not just unsigned. Garth Brooks just did it.
So they should all be silent and not share their often hard learned lessons?
Makes me wonder who’s really the bitch here.
Not the end.
And here…. Is there a mirror you can post a link to, Paul? Seems like there’s a good fair use case. The transformative use is treating the contract as a piece of news rather than as a document to be enforced. See Núñez v. Caribbean Int’l News Corp., 235 F.3d 18, 22 (1st Cir.2000) (allowing publication of three pictures for news purposes, but clarifying that “[t]his is not to say that … use of the photographs was necessarily fair merely because the photographs were used for news purposes, nor does it establish a general `newsworthiness’ exception.”).