Just Received My $5.05 Mechanical Royalty Check From HFA…

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Seriously? After receiving a check for just $5.05 from the HFA, Lowery is intensifying his war against Spotify, HFA, and the NMPA.

You’re kidding me right?  What is this for? No accounting? No cover letter.  Is this some sort of ‘bait’ check? ‘

Lowery suspiciously dubs the check a ‘sleazy legal trick’ to obtain a ‘implicit license,’ and questions if other independent artists received the same.  Lowery — an outspoken artist advocated — wants transparency, specifically in-depth details which include: tracks being streamed, number of spins, accounting time period, and how the HFA arrived at this amount.  A mere $5.05 check doesn’t cut it, and doesn’t include any of that.

Lowery says the choice is clear and simple for songwriters and publishers.

Do you want ”a backroom deal between related parties OR a transparent court supervised process?”  If you opt for the former, you’re more than likely going to end up with something like this…

Just Received My $5.05 Mechanical Royalty Check From HFA...
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The check comes during a lengthy and expensive legal battle between Lowery and Spotify over unpaid royalties, a battle royale which also involves the National Music Publishers Association (NMPA) and Harry Fox Agency (HFA) a group specialized in mechanical royalties that has been deluged with accusations of incompetence.

Spotify has been under fire over unpaid royalties for some time.  As a result they hired HFA (a former subsidiary of NMPA) to obtain mechanical licenses of songwriters and publishers that opted into their service, as well as sending ‘Notices of Intent’ on Spotify’s behalf for those songwriters and publishers who haven’t yet opted into their service.

But is this a giant conflict of interest?  Lowery certainly thinks so.  Despite having a considerable catalog, no license was obtained for any of Lowery’s works by the HFA, no ‘notice of intent’ has been sent, and no royalties paid (outside of the above).  This prompted Lowery to file a massive $150 million class action lawsuit against Spotify, which has been ongoing since December 28th, 2015.   The lawsuit alleges that Spotify is distributing copyrighted content while skipping key royalties, a federal copyright breach.

Shortly after the lawsuit was filed, Spotify announced an out-of-court agreement with the NMPA, and this is when things got a little interesting.  The agreement aimed to create a better way of finding publishers who are rightfully owed streaming royalties, as well as dealing with the mass of money apparently being held by Spotify for unmatched royalties.  Sounds like a workable solution, but Lowery claims that it was a direct attempt by Spotify to deflate the class action and says that the streaming platform is ”using misleading information to push putative class members into a lowball royalty settlement with the National Music Publishers Association.”

Lowery then requested access to review all communications Spotify USA issues to putative class members related to its settlement with the NMPA, but Spotify fought back saying that Lowery is making baseless claims and continuously changing the goal posts.

But if Lowery is receiving checks like this, there’s little wonder on why he’s complaining.  And if there isn’t even a revenue breakdown for the artist, how can anyone know if the payment is correct?

It definitely seems as though there’s a serious lack of transparency here.


(Image by Pictures of Money, Creative Commons, Attribution 2.0 Generic, cc by 2.0)

17 Responses

  1. Me

    To be fair, Camper Van Beethoven only has a small fraction of their catalog left up on Spotify. Considering this, the fact that their most popular song is a cover, and that they don’t appear to be getting that many streams to begin with, how much does he expect to receive?

    • Me too

      The amounts don’t matter. Lowery is an activist and wants to see the system fixed through a trial by fire. giveb Spotify has settled after a negotiation, it’s clear they acknowledge a problem and are willing to talk about fixing it, I don’t personally see why a lawsuit is necessary (lowery could conceivably just call up Spotify and figure it out), but I suspect it’s a principle thing.

      • Me2

        Hello fellow Me’s

        For sure he’s doing it out of principle. He doesn’t like the way songwriters are being treated and I for one agree.

        Keep in mind that Statutory damages in this case could legally far exceed any mechanical royalties.. thousands per song.

        My analogy for “willing to talk about fixing the problem” would be like someone driving off with your car and then talking about an appropriate rental rate after you tracked them down in another city.

        • Anonymous

          actually I disagree with this analogy. Since artists and the marketplace are both required to have a functioning industry, I think of them as neighbors. If your neighbor owes you money, you ask him for it. If he says, “shit, you’re right. I made a mistake and didn’t pay you what I owe you. Let’s sit down and talk about how to work this out”, why would you sue them? if he ignores you, you can compel him to pay via a lawsuit, but why do it as a first move if he/she is willing to sit down and work it out??? These lawsuits sound like either misguided activism, or an attempt to abuse the courts with the possibility of spectacular damages.

          So, is Lowery the tone-deaf activist who is using the courts to make a point despite the fact that a proven non-litigation pathway is possible, or an ambulance chaser? Neither sounds all that good to me.

          • Me2

            Analogies aren’t always perfect, but you’re talking about Spotify as if it were the totality of the marketplace.

            I tend to view it as a single company that ignored the law and proper procedure regarding compulsory license. If the other companies did it too, does that make it ok? Because, you know, the “marketplace”?

            This is real basis for action, class-action and efforts to get this straightened out on a systemic level. The streaming companies are playing hardball, I see no reason why an artist shouldn’t be able to as well. Lowery is far from tone-deaf, he’s cutting though the drone in a way that you aren’t

          • Troglite

            If Lowery’s motive was limited to his own personal finances, you’re right.. he could have negotiated a settlement outside of the court system. The fact that he hasn’t done that should make it clear that he is fighting for the benefit of other musicians and songwriters. Spotify has consistently refused to stop the practice in question, will not provide a comprehensive accounting of the works that have been available on their platform without the appropriate licenses, and will not provide an accounting of the number of times each of these works was actually played on their platform. How do you compel a company to live up to their legal and ethical obligations when they refuse to do so voluntarily?

    • Paul Resnikoff

      We were just discussing this at the office. Looks like Camper van Beethoven easily has over 1 million listens across just the top songs. So, is that $5.05? Who knows, there’s no accounting, breakdown, or any accountability on this check.

      • Me2

        This is the problem. We knew that the old school methods were opaque, but in this supposedly enlightened age of data, what’s up?

        Not to mention that this reeks of post-emptive tactic, like those after-the-fact NOIs.

  2. Nicky Knight

    You can choose not to have your music on Spotify and if it’s there somehow without your / copyright owners authorization then write them and request it be removed..

    The real culprit of giving music away for free is our friends at YouTube – everyone says it’s ok because it’s promotion but hey.. what’s the difference between YouTube and Spotify really … Of course you can monetize your YouTube content and if you have ten billion views you’ll make something that’ll buy more than just lunch..

  3. Vail, CO

    NMPA = Corruption.

    C’mon, everyone knows NMPA is an old boys club for the biggest publishers. Everyone else outside of about 5 major publishers gets screwed by this.

    Remember — if you’re not a member of NMPA you get NOTHING. But the real corruption is that the NMPA distributes all unclaimed royalties to themselves, even if it’s for someone else (who is not an NMPA member).

    • Me2

      Quite true, and this is more generally why it’s a rough existence outside of the dominant industry channels.

  4. Jeff Robinson

    Overall, ouch.

    We didn’t receive any royalties for Mechanicals from Music Reports until the NOIs had been delivered.

    Some services paid retroactively as the NOIs didn’t arrive until 9 to 12 months after use of the music began. Ironically, Groove paid mechanicals before ANY songwriting royalties came through BMI. Just this last cycle, we were paid Groove songwriting royalties through BMI for Q3 2014- which is 1 year and 9 months after the airplay occurred.

    None of this stuff is lucid. All of it is a quagmire.

  5. Versus

    Lowery is fighting the good fight and we should support it in every way. We need real transparency before we can even begin to reform this dysfunctional, exploitative, non-system.

  6. Rick Shaw

    Say hello to the gift horse. It’s $5.05 you didn’t have before, complainer.

    • Pedicab

      Rick is short for “corporate dick sucking shill.”

      • Rick Shaw

        Nice childish response. It just shows that you have nothing.