A year-long lawsuit with estimated damages of $1.6 billion has now been settled.
Last year, Digital Music News broke the news that Wixen Music Publishing had filed a massive, $1.6 billion-plus lawsuit against Spotify. Interestingly, the lawsuit was filed over the Christmas break to beat a sneaky deadline buried within the language of the Music Modernization Act.
The MMA, which is now law, stipulates that Spotify is immune from any litigation related to mechanical licensing filed on or after January 1st, 2018.
Crafty stuff — but not everyone was caught unawares. The astute team at Wixen Music Publishing filed its lawsuit in late December of 2017 — more specifically, December 29th, just two days ahead of the new year. Others publishers may be kicking themselves, with U.S. law now boxing out further legal action.
The quick legal reaction means that Wixen is now likely to enjoy a far better mechanical payout than anything stipulated in the MMA.
Early this morning, Wixen tipped its settlement deal with Spotify.
But neither party is disclosing the terms of the deal. Wixen had alleged that Spotify used tens of thousands of its songs without permission or proper royalty payouts — for years. But all that acrimony is now in the rearview mirror, with a “fair and reasonable” deal now hammered out.
“Spotify is a huge part of the future of music, and we look forward to bringing more great music from our clients to the public on terms that compensate songwriters and publishers as important partners,” Wixen president Randall Wixen offered.
“I am truly glad that we were able to come to a resolution without litigating the matter. Spotify listened to our concerns, collaborated with us to resolve them and demonstrated throughout that Spotify is a true partner to the songwriting community.”
We’re not clear on the actual settlement amount, though we have a feeling it’s lower than $1.6 billion. For Spotify, the resolution further puts to bed a lingering royalty mess, with the MMA largely insulating the streaming giant from further issues.
All of which sounds great for investors — though shares of SPOT were still plunging in Thursday trading.
The Wixen catalog is immense, with heavyweight songwriting star power. That includes catalog from the likes of Tom Petty, Neil Young, The Beach Boys, Stevie Ray Vaughn, and members of Rage Against the Machine, The Byrds, and The Black Keys. So Spotify was undoubtedly eager to resolve the matter.
Also motivating the lawsuit was a class action settlement deemed unsatisfactory by Wixen. The $43 million pre-MMA deal involving indie publishers was considered far too low for Wixen, and motivation enough for the litigation. In fact, Wixen wasn’t alone in its dislike for the $43 million settlement, with other potential class members also grumbling given the broader levels of infringement involved.