Adam Parness, former Global Head of Publisher Licensing at Spotify, has criticized the streaming service’s subscription changes, calling them “misguided and unfair.” In an article for Billboard, Parness said that the new “bundled subscription” is an ill-informed attempt to deprive songwriters and music publishers of their rightfully earned U.S. mechanical royalties. The premium individual, duo, and family subscriptions now offer audiobooks, which is what the bundled subscription entails.
Introduced in March, the change raises concerns that the 2022 settlement – Phonorecords IV – reached by Spotify with music publishers and other music streaming services in the US, might mandate paying a lower mechanical royalty rate to publishers and songwriters than standalone music subscription services. The settlement comes into effect when music streaming services introduce a “bundle” service.
The Mechanical Licensing Collective (MLC), a non-profit organization, filed a lawsuit against Spotify last week, alleging that the streaming giant is underpaying royalties. There are allegations that Spotify’s new system would limit royalty payments in the US, which Sony Music Publishing is also considering legal action over.
Parness shares that the agreed-upon revenue share rate for Spotify premium, currently 15.2%, may effectively be reduced to less than 12%, depending upon a number of factors. Losses to songwriters and publishers are estimated to be $150 million annually and are expected to grow over time as subscription revenue and users increase. He has appealed to the senior leadership team to do the right thing by songwriters, regardless of legally permissible strategies
Read the full article from Mixmag here: Read More