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Spotify to invest more resource into “comprehensive publishing administration system”

By | Published on Thursday 24 December 2015


Spotify has said that it plans to “invest in the resources and technical expertise to build a comprehensive publishing administration system”, so to tackle the issues that remain in how it pays songwriters and publishers for the songs it streams.

It follows Spotify’s temporary spat with Victory Records earlier this year over unpaid mechanical royalties to the label’s sister publishing company.

When it comes to sound recordings, services like Spotify assume that whoever provides a track is the copyright owner – or the rights owner’s representative – and they get paid whenever that recording is streamed. But when it comes to the accompanying song copyright, streaming platforms don’t know who to pay, so usually rely on the publisher – or the publisher’s collecting society – to claim any royalties due for the streaming of their songs.

This is a relatively cumbersome way of doing things, and requires publishers and collecting societies to process complete usage reports from each streaming platform every month, to work out which songs in their repertoire have been used. But with no central database of song copyright ownership available, and no accompanying database to link the codes used to identify recordings (ISRC) to the codes used to identify songs (ISWC), there isn’t really any better way to do it.

It’s all the more complicated in the US where the collecting societies that Spotify works with only represent the so called performing rights of the songs streamed. But a stream also exploits the mechanical rights, so two sets of royalties have to be paid. In Europe, alliances between publishers and collecting societies mean that a streaming service can usually cover performing and mechanical rights through once licence, even if the money is then split up behind the scenes.

It was mechanical royalties that were at the heart of the Spotify/Victory fall out. Opinion is divided, even within the music publishing sector, as to whose responsibility it is to sort out the complexities and database gaps that mean not all streaming royalties get paid to the right people, ie do the publishers need to provide better data, or do the digital service providers need to be more proactive in this domain?

Spotify, which has started courting the songwriter community this year in much the same way it previously reached out to artists, is now pledging to be more proactive.

In a blog post, the streaming firm’s Global Head Of Publisher Relations, James Duffett-Smith, writes: “One of our core commitments is making sure that everyone involved in the creation of music is paid fairly, rapidly, and transparently. Unfortunately, when it comes to publishing and songwriting royalties, especially in the United States, that’s easier said than done because the data necessary to confirm the appropriate rightsholder is often missing, wrong, or incomplete”.

He goes on: “Today we are excited to announce that Spotify will invest in the resources and technical expertise to build a comprehensive publishing administration system to solve this problem”.

Admitting that even with Spotify pumping more resource into this issue, it’s not going to result in super-efficient royalty payments over night, Duffet-Smith adds: “In the meantime, we have been working closely with our partners and friends in the industry, especially the National Music Publishers Association, to find the best way to correctly pay the royalties we have set aside to the right publishers and songwriters. But we want to do better than that – we want to fix the global problem of bad publishing data once and for all, and that’s why we’re making this commitment today”.