Tensions between Spotify and creators are at an all-time high, as a recent saga of events have resulted in the streaming service reaching a conclusion that music publishers owe them money for 2018 due to an overpayment on their previous rates.
MusicBusiness Worldwide reports that Spotify and other streaming operators (including Pandora, SiriusXM, Amazon, and Google), commenced a formal appeal against mandated pay increases for publishers and songwriters in the United States.
According to the US Copyright Royalty Board (CRB), between 2018 and 2022, mechanical streaming payouts from Spotify (and the above streaming operators), would increase by 44% or more.
Due to an under-reported complexity pertaining to student discount offers and family plan bundles, with relation to the CRB decision, Spotify has calculated that they have overpaid music publishers in 2018 due to these discounted packages. In short, they’re pissed off and want their money back.
A Spotify spokesperson said: “According to the new CRB regulations, we overpaid most publishers in 2018…Rather than collect the 2018 overpayment immediately, we have offered to extend the recoupment period through the end of 2019″.
Naturally this news has not been received favourably by publishers. One publisher said, “Spotify is clawing back millions of dollars from publishers in the US based on the new CRB rates that favor the DSPs, while appealing the [wider CRB decision]. This puts some music publishers in a negative position. It’s unbelievable.”