One of Spotify’s Biggest Rivals Will Join the Fight Against the ‘Mechanical’

Spotify may have an ally in its newfound war against music publishers.

Spotify’s decision to battle back against mechanical license liabilities isn’t going unnoticed.  In fact, it may be drawing substantial support from streaming rivals.

In confidential conversations Thursday morning, a representative at one of Spotify’s top rivals informed Digital Music News of their upcoming support.

Noting that the ‘mechanical’ reproductive license is ‘an overreach’ for streaming music services, the company feels that Spotify is ‘largely correct’ in its decision to fight the requirement.  “We want to pay our fair share and get everyone paid fairly — and really beyond that in many cases,” the source noted.

“But the mechanical for reproduction right — it strikes us as unfair.”

For those just joining this stand-off: Spotify has recently reversed its opinion on paying ‘mechanical’ reproduction rights to music publishers.  That represents a stark reversal, especially considering that the streaming giant has finalized two class action settlement agreements on the matter.

Surprise! Spotify Says They Don’t Owe Anything for ‘Mechanicals’

The value of those agreements topped $75 million, though they hardly ‘settled’ anything.  Instead, publishers and songwriters are now ‘going rogue’ and choosing to abstain from the settlement classes, sensing far juicier payouts for direct legal actions.  That includes an initial round of suits valued at more than $365 million, considered the first of a raft of similar actions.

All of which has prompted Spotify to question the foundation for a reproduction right in a format that hardly ‘reproduces’ anything.

That pushback appears to be resonating with the broader streaming music community.

Our source said that his company will remain on the sidelines for now.  But if matters escalate, expect support in the form of an amicus brief or pushback in separate litigation.  Other moves may include a “realignment” on the legal side, or a more formal press release statement.

So who the hell is this?

That’s a disclosure “for the appropriate time,” particularly if this current case advances.

Also noting that “the feeling is that this is going too far,” the source said they welcome “some sanity” ahead.  “‘We’re really struggling to make this work for everyone,” the executive shared. “But in reality we’re not stand-alone profitable and we’re not ATMs I think is the message.”

“So look — it’s really about what we feel is fair here.”

But with potentially billions at stake, this may have the markings of a music industry World War III.  And just yesterday, NMPA chief David Israelite promised a fight to finish against Spotify.  “This is now a fight with all songwriters – not just a conflict with these particular plaintiffs,” Israelite told Digital Music News.

“NMPA will be engaging in the manner and the terms of our choosing, but the one certain thing is we will win this fight.”

The World’s Largest Music Publishers Just Declared War on Spotify — In No Uncertain Terms

Meanwhile, Spotify is showing no signs of softening its stance.  After digging through the filings in the current mechanical case against Bluewater Services Corporation, DMN found yet another document pushing back against the licensing requirement.  Now, it’s up to a federal judge to determine the next steps.

More updates ahead.

3 Responses

  1. Anonymous

    I’m beginning to wonder if Jeff Price and Audiam are doing more harm than good to the music industry.

    • Dean Hajas

      http://www.warnermusic.ca/mixtape/
      I think I figured out who the SPOTIFY Mystery Ally is……..

      I agree…Jeff Price is an angered former TUNCORE exec. and never could get his sights set back on helping people, but truly just getting back what he lost.

      SOCAN bought right into it just 2 years after he was fired, they purchased AUDIAM for an “Undisclosed amount” along with Medianet and Blockchain.

      Putting all the eggs into Jeff’s basket, SOCAN has been smug with our Royalties and the 3 year rule. If they say they can’t find us (with no written proof, of either emails, or last known address, or announcement to the public through print form or social media) SOCAN absorbs the very Royalties they say they are fighting for to give to us. The balance of 21% of GOWLINGS depends on SOCAN taking Canadian Venues, Bars, Gyms etc to court, if they don’t pay the “Levies and Tariffs” imposed on them. The thing that needs to be exposed here as well…”The Restricted Artist Playlist” that the industry is not to happy about with Sir Paul McCartney and the Beatles is, that they do not give PRO’s permission to licence their music. When SOCAN bullies a venue to purchase a license from them, they say it’s for “ALL MUSIC FROM AROUND THE WORLD”. If Sir Paul McCartney or any of his friends…(and he has a couple) walk into a venue with his or the Beatles music playing, he’s within his Copyright Holder rights to sue the Venue owner. SOCAN is selling a License without obtaining permission…this is illegal SPOTIFY….
      Speaking of…I posted our video on FB of going to SOCAN head office this summer. They were playing music from SPOTIFY, but answered on video that they were not tracking the music being played. When asked to Rodney Murphy Head of A & R “how are you paying those musicians then, if you aren’t tracking your playlist”..he and the rest of his staff stood in Zombie silence. Hope this also helps you out SPOTIFY…anything to help legitimate business. It’s not SPOTIFY that agreed in 2003 to remove two words from the definition of STREAMING at the Superior Court Level…that was all our Canadian Agencies going to bed with the Government of Canada and Bell, Rogers, Cogeco and 4 others, who created this issue. They led the unsuspecting Superior Court Judge right into a decision that benefited the Corporations, the Agencies, and the Government through taxation of associated cell phone and internet use. They shot us, and themselves in the foot. Now with Soundexchange, Medianet, Re-sound and Audiem to name a few, exactly why do we have the need for SOCAN and 302 full time and part time employee’s. We can hire a party provider and caterer that will do a much better job than SOCAN, because quite frankly, they are Not For Profit liars, that hide their income, and make bogus claims to our Canadian Revenue Agency. I’m asking for a full inquiry, as to the cash flow of SOCAN. Up until now SPOTIFY, they haven’t taken an audio sample in their business model, nor does CIPO. So they infringe the artists easily, because they take their direction from Record Companies who steal artists music, and say if you have a problem, “hire a lawyer, it’s a civil matter”.
      Hope this helps out Spotify. You are absolutely correct in the mechanical license argument…..AND THEY KNOW IT…..Jeff Price is going down with Eric Baptiste…/ SOCAN’T is what we like to refer to them as.
      If we could agree to put back Transmission and Broadcast in the definition of Streaming, then the artists who you play would have opportunity to make a decent living again. Thank for hearing me out. Dean Hajas [email protected]

  2. Esquire

    I know no one who opposes paying songwriters, but who can defend the vast array of entities with separate piles for both performance and mechanical on the same stream? How can it be both, and at the same time? And why so very many hands in the middle?

    Paying songwriters isn’t the problem, it’s the answer to the problem, which is endless middlemen and mindless fragmentation. Digital should mean direct, not an analog money trail with many stops down a long and winding road.