Spotify will pay about $21 million to put an end to years-long discord with a songwriters and music publishers group over unpaid royalties.
The Swedish streaming music service agreed to pay the National Music Publishers Association roughly $16 million plus a $5 million “sweetener” to put to rest an ongoing fight over what are known as mechanical rights, a person familiar with the deal told TheWrap.
The settlement, announced Thursday by the NMPA, will simplify the process for copyright holders to claim royalties that they’re owed where the ownership information is unclear. The deal also calls for the creation of a system for better matching license payments to Spotify listening. In exchange, publishers agree not to file copyright infringement claims.
Mechanical rights give a copyright holder control over the ability to reproduce a musical work. It’s a licensing structure that dates back to the early years of mainstream music, when player-piano rolls constituted the music industry, but the rights have persisted as a thorny complication to digital music.
David Israelite, NMPA’s chief, said the group was thrilled the agreement would mean independent and major publishers and songwriters will be paid what is owed them.
“We must continue to push digital services to properly pay for the musical works that fuel their businesses and after much work together, we have found a way for Spotify to quickly get royalties to the right people,” he said in a statement.
Spotify’s head of communications, Jonathan Prince, said the company was looking forward to building a comprehensive system to administer the payments. “As we have said many times, we have always been committed to paying songwriters and publishers every penny,” he said.