Music Streaming Service Spotify Just Got Sued for $1.6 Billion

Wixen Music Publishing, which represents artists like Neil Young, Tom Petty, and Stevie Nicks, just sued music streaming service Spotify in a US$1.6 billion lawsuit. It alleges that Spotify uses thousands of songs without a proper license (via Variety).

Can’t Stop Suin’

Back May 2017, Spotify was involved in a class-action lawsuit that many of Wixen’s artists were part of. At the time, it offered a US$43 million settlement. But in the suit that Wixen filed last Friday, the publisher says the settlement “does not adequately compensate Wixen or the songwriters it represents.”

Spotify headquarters. Spotify is being sued by Wixen Music Publishing, which represents artists like Neil Young.
Spotify headquarters.

Prior to launching in the United States, Spotify attempted to license sound recordings by working with record labels but, in a race to be first to market, made insufficient efforts to collect the required musical composition information and, in turn, failed in many cases to license the compositions embodied within each recording or comply with the requirements of Section 115 of the Copyright Act. Either a direct license from Wixen or a compulsory license would have permitted Spotify to reproduce and/or distribute the Works as part of the Service, including by means of digital phonorecord deliveries (“DPDs”), interactive streaming, and limited downloads. But Spotify failed to obtain either license type…

The company’s president, Randall Wixen, offered his own statement, saying that Wixen isn’t taking part in the Music Modernization Act introduced last month. This would simplify digital licensing and increase rates. We’re just asking to be treated fairly. We are not looking for a ridiculous punitive payment. All we’re asking for is for them to reasonably compensate our clients…”

It’s not clear whether Wixen will win the full amount of money, but if it does, that’s almost 10% of Spotify’s rough value. Spotify might need another product in the future, as even Jimmy Iovine of Apple says that music streaming isn’t a great business.

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