Spotify Settlement Is Music to Artist's Ears

Spotify, the music streaming service, has managed to wriggle its way out of a potentially crippling lawsuit regarding copyright infringement.

In 2015, Spotify was sued after musician David Lowery filed a class action lawsuit and singer song-writer Melissa Ferrick also filed a claim that the music streaming service was knowingly infringing on their copyright by not paying for mechanical licenses. These are a type of publishing license which specifically cover the reproduction of copyrighted work. The two separate claims were consolidated into one in 2016.  Spotify, this week, settled the case however the amounts in question still need to be assessed by the court.

According to Forbes, if the court approves the settlement, Spotify will have to fork out $43.4 million to the musician and singer-songwriter. This sum represents the amount it would have costed to pay off the mechanical licenses that would have covered the reproduction of the songs if they had been paid for.  If the sum is approved, the payment will be distributed to all of the Claimants in the lawsuit.

The Claimant's in the lawsuit made their filing after being angered at Spotify's failure to compensate them. Representatives for Spotify have explained that when rightsholders cannot be identified and therefore cannot be given their royalties, these royalties are set aside until the rightsholders can be identified. Spotify however has been criticised for failing to make adequate efforts to find the rightsholders.

If the court approves the settlement figure then it is said that this will be a win for both. Spotify will be paying out a lot less than the originally claimed $200 million and will be more equipped in dealing with the royalty payment of 'lesser known rightsholders'. On the other side of the coin, the Claimants to the claim are likely to take away more money from the lawsuit than they would have if they had been paid royalties as normal.

The case highlights the importance of acknowledging the rights of copyright owners and will be a welcome development for musicians who feel their revenue streams are being squeezed by streaming services such as Spotify.