Spotify, NMPA Reach Settlement Over Mechanical Royalties Dispute

Spotify and the National Music Publishers' Association settled Thursday over claims the company failed to pay mechanical royalties on songs played via its streaming service that Spotify claimed lacked sufficient ownership information. Spotify faced multiple lawsuits (see 1512290048 and 1601110047) over claims the company wasn't obtaining mechanical licenses on copyrighted music. The Spotify-NMPA settlement will let music publishers claim royalties on performances of songs in the U.S. via Spotify for which ownership information “was previously unknown,” Spotify and NMPA said in a joint news release. The agreement sets up a compensation fund for unmatched royalties, with Spotify's contribution to that fund being a “substantial” proportion of the amount of unpaid royalties that the company currently holds, they said. Neither NMPA nor Spotify confirmed the size of the compensation fund. An industry lobbyist told us it would be around $30 million. “I am thrilled that through this agreement both independent and major publishers and songwriters will be able to get what is owed to them,” NMPA CEO David Israelite said in a news release. "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.”