Spotify wants to take back money from ‘overpaid’ songwriters, publishers

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BTW

Is 50 Cent running Spotify now? The music streaming service claims to have overpaid its songwriters and publishers in 2018 and is now demanding that money back.

The announcement comes after the U.S. Copyright Royalty Board (CRB) ordered services like Spotify, Pandora, and Apple Music to increase royalty payments by more than 43% over the next five years. The CRB’s decision also mandated that discounted plans for families would be treated as 1.5 subscribers while similar plans for students would count as 0.5 subscribers.

Based on those discounted rates, Spotify is claiming it paid out more money in 2018 than was actually required under the new deal and now wants that lost revenue back. Spotify told Engadget that it would simply payout less in 2019 to make up for the losses.

“Rather than collect the 2018 overpayment immediately, we have offered to extend the recoupment period through the end of 2019 in order to minimize the impact of the adjustment on publishing companies,” the spokesperson said.

But publishers and songwriters aren’t having it. Speaking with Music Business Worldwide, David Israelite, the CEO of the National Music Publishers Association, scoffed at Spotify’s demand.

“I find it so hypocritical for a digital service that is appealing the CRB decision to then take advantage of the parts of that decision that benefit it,” Israelite said. “I guess we shouldn’t be surprised.”

Spotify clearly sees it a different way.

“While the appeal of the CRB decision is pending, the rates set by the CRB are current law, and we will abide by them–not only for 2018 but also for future years in which the amount paid to publishers is set to increase significantly,” a Spotify spokesperson said.

Spotify has also argued that the new royalty rates hurt both the “music licensees and copyright owners.”

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H/T Engadget 

Mikael Thalen

Mikael Thalen

Mikael Thalen is a tech and security reporter based in Seattle, covering social media, data breaches, hackers, and more.