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Why is Spotify paying out $21 million?

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Spotify

Working out how to divvy up capital in the music industry is challenging, but Spotify’s making progress.

Spotify is set to pay out an impressive $21 million to artists and publishers in unpaid royalties.

The market-leading streaming service has announced a “landmark agreement” with the National Music Publishers’ Association to dole out cash to “rightful recipients”.

Previously, Spotify struggled to pay timely royalties to those in the music industry due to the difficulty of matching works to the rightful owner.

The deal means that copyright owners can now easily identify their works, and reap money already set aside by Spotify for the past usage of “unmatched works”.

“As we have said many times, we have always been committed to paying songwriters and publishers every penny,” said Jonathan Prince, Spotify’s Global Head of Communications.

Prince continued: “We appreciate the hard work of everyone at the NMPA to secure this agreement and we look forward to further collaboration with them as we build a comprehensive publishing administration system.”

The agreement includes the payment of bonus compensation, makes it easy to identify and properly claim “unmatched” works, and ensures Spotify will continue to work with the NMPA.

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“I am thrilled that through this agreement both independent and major publishers and songwriters will be able to get what is owed to them,” said David Israelite, CEO of the NMPA.

“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.”

What are your thoughts on Spotify? Let us know in the comments below.

Hamish Campbell

March 18, 2016, 10:55 pm

I still think it's dumb that songwriters are paid by the player of the music, and not the performer. Imagine if your local hardware store had to independently pay the producer of an electric drill, and all the individual patent holders that were used in its construction. Ridiculous system. If performers don't write their own stuff, then they need to pay songwriters out of the money they earn from performing the material.

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