21 ms·

Spotify Hit with $150M Class Action Over Unpaid Royalties

161 points by sageabilly 11y ago

6stringmerc 11y ago
I have mixed feelings about this particular case, because on the one hand, yes, I want artists compensated fairly, and on the other hand, I do hold the belief that Spotify is putting a good-faith effort towards paying musicians and "rights holders" day in and day out. I'd like to see this case actually go to court, if anything so that it would force all three parties - Lowrey, His Label(s)/Management/Publisher(s), and Spotify - to provide some documentation regarding how this system actually works. My understanding, for good or ill, is that Spotify points the finger at royalty collection societies / labels / publishers / etc when possible (and not forbidden by contract or NDA), and royalty collection societies / labels / publishers / etc tell artists to blame Spotify. I'm not fond of the murky arrangements what so ever! Getting a good, clear understanding of the mechanics would be nice, well, for other artists like Lowery. Could this case show that Lowery's own management and labels haven't been doing their part to get him his money? I'm curious. Will the case ever go to court, or is it maybe more of an avenue to try and get a settlement check? I could see that happening too. I might be in the minority as an independent, but I've been quite pleased with the reporting and transparency by Spotify, iTunes, et al by way of my distribution firm, and therefore have no real basis to feel compelled to try and join the suit.
- s73v3r 11y ago
  Good faith is one thing, but at the end of the day, if they're not paying what they owe, then they shouldn't be able to continue using the stuff.
- sparky_ 11y ago
  Have the streaming services made it any easier of late for a indie musician to publish their works? I'm several years out of date, but I remember at one point I'd looked into it, and the closest you could get to self-publishing was to go through an indie distributor like CD Baby. But at no point could you actually upload MP3 files and album information directly to Spotify.
  - 6stringmerc 11y ago
    Still have to go through a distributor to get on Spotify, but Pandora has a different system requiring submission and review.
- josh2600 11y ago
  For context: http://www.theverge.com/2015/5/19/8621581/sony-music-spotify-contract http://www.theverge.com/2015/5/19/8621581/sony-music-spotify...
  - 6stringmerc 11y ago
    An excellent point of reference for sure. I've reviewed that in the past and I'm pretty comfortable thinking the consensus by musicians was "Wow, Sony really throws its weight around and gets everything it can for itself and only bothers with artists when it actually has to pay them legally" which, all kidding aside, is kind of what a lot of people do (or should) expect of recording industry practices. As in tenths of tenths of a cent: >Some artists have clauses in their contracts to get a larger share of the streaming revenue, and some artists are still operating under CD-era contracts that only give them 15–20 percent of their streaming revenues. I don't think it's right to lift the entirety of the comment from over at the Billboard site, but one person has already noted the Copyright when the files were on Spotify were attributed to what appears to be Lowery's label at the time. It's an interesting bit of investigation that I'm sure the Spotify team would pursue. I do get the feeling that Lowery doesn't have much of a "willful infringement" case when Spotify is, by outward appearances, setting aside proper monies to pay out when they get the right information. If that turns out to make Lowery's label look bad for agreeing to allow streaming and agreeing to the compensation being offered by Spotify (against his wishes?), I won't be surprised really.
- Avenger42 11y ago
  Yeah, it makes me wonder whether his complaint is really with his label, but he can't sue his label without creating friction. So he sues Spotify, Spotify performs discovery which shows his own label is withholding these royalties, he turns around and sues his label (or more likely, settles with them). Better still - what if Spotify turns out to be right, and he didn't provide the required information to Spotify to allow them to pay him his royalties, so his complaint is really with himself?
  - 6stringmerc 11y ago
    Agreed! I don't think there's any chance he could get a class action status against his own label, but he successfully got out in public quite a while ago bitching about how he made roughly $17 for a milllion streams of "Low" and that got his profile up. My gut instinct is that the "willful infringement" isn't going anywhere, and after a critical breakdown of accounting, Lowery is probably owed another check that could buy him lunch at Chili's. This doesn't seem anything close to the kind of heavyweight punch that Eminem threw at Universal over royalties. You're right though, if he's at fault for not getting himself paid, that'd get a chuckle out of me, and also another facepalm for an instance of a musician who should stick to the music part and not the businessman/activist part.
    - bsder 11y ago
      I suspect that the main point is to drag the accounting into the light. Both Spotify and the record companies are going to be in for a shellacking if they let this go to trial given that both of those parties are carrying on some very shady money games.
    - deleted 11y ago
      [deleted]
  - Caprinicus 11y ago
    Then he must sue himself
- mbucc 11y ago
  > I do hold the belief that Spotify is putting a good-faith effort towards paying musicians and "rights holders" day in and day out. The NPR piece said they asked a copyright laywer to look up the copyright for that song, and it took ten minutes (the copyright holder had filed a copyright). Based on that piece, if I was the judge and jury, I would expect a company valued at over $8B to have done a better job, especially given how the penalties are structured. His song was played over 20,000 times, for which he received no compensation. IIRC, the NPR piece said the max penalty is $150k per infringement. Ouch.
- LargeCompanies 11y ago
  The record companies collectively own a 20 percent stake in Spotify. Thus and per their record of swindling their artists I don't have much faith in Spotify not following similar tactics. This is a just case!
- TheCondor 11y ago
  Wouldn't good faith be to remove it from their catalog until they could properly purchase it?
callesgg 11y ago
My understanding was/is that spotify goes in to agreements width record labels and the record labels provide spotify with music. If i am right about that, then the record label that provided the music would be at fault. As they sold material that they did not have the rights to sell. I guess you could find them at fault as they are not verifying what they are getting. But that would not be a civil case.
- dpkp 11y ago
  Labels deal in sound recordings, which have historically been licensed independently of the underlying music compositions. Most distributors like Spotify will obtain separate licensing for compositions, whether from collecting societies like ASCAP, BMI, or SESAC, and/or through direct deals with artist / publishers themselves. This setup may seem odd, but but it has historically been used to provide some protection against labels "screwing" artists - b/c although a label takes the sound recording rights and therefore controls royalty payments back to artists for the recording [if any -- after recoupment, etc], the artist typically retains their own publishing rights and can license those separately for $$ not subject to their label deal (though subject to cuts from societies, and their individual deals with publishers etc). This opens up new revenue streams for artists to get paid outside the control of their label: by radio stations/bars/restaurants via PROs, or in sync-right deals for placement in movies or on TV.
iamleppert 11y ago
Is music really worth this much? I mean, its intrinsic value to society? It's normally used as the backdrop to a party, or exercising, or some other such thing, but really, $150,000 per song? Why can't we put a clamp on the problem of every random artist thinking they've created something that lasts a few minutes and has more value than most people make in a year? The entire system of copyright and recorded art needs to be abolished, and any music that is recorded instantly becomes the public domain. This would do away with many industries that serve almost no purpose for society, other than to attempt to extract value where no value has been created. The conventional way for artists to make money should come from performance.
- s73v3r 11y ago
  Those are punitive damages. So it's not just the value, but there's also a punishment in there. If you only had to pay the 99 cents or whatever per infringement, then no one would care, because you wouldn't have to pay much if you got caught. "The conventional way for artists to make money should come from performance." Who are you to say how someone else should make money?
- jMyles 11y ago
  I wholeheartedly disagree with your assessment of the value of music (I think it might be the most valuable contribution our species makes to the universe), but I do agree with your solution.
  - eugenekolo2 11y ago
    As somebody who enjoys music every day, attends live performances, and keeps up to date with some music blogs. I think it's an over assessment to call music the most valuable contribution our species makes to the universe. Nevermind the fact that we have no clue what our contribution is at all in the universe. Music is good, it's shaped societies, and the like, but so have many other things, and I don't think our species would've died off without music. TBH I think most people would barely notice after a little bit if music just disappeared.
  - Natsu 11y ago
sandstrom 11y ago
Record labels was useful historically, because they handled distribution (physical stores, CDs, different countries). Nowadays, record labels are a PR-agency at best and should be compensated as such. Artists getting a 10-20% slice[1], the typical revenue-split, sounds like a rip-off to me. A good artist, using Instagram/YouTube/FB/website + Spotify/Rdio for distribution doesn't need much help from a label. Sure, a producer, studio, PR manager and other staff is useful, but that doesn't motivate a 90% cut of profits (in my view). [1] http://www.wsj.com/articles/artists-press-for-their-share-1405905178 http://www.wsj.com/articles/artists-press-for-their-share-14...
- dpkp 11y ago
  But the article is about music publishers, not music labels.
- dinkumthinkum 11y ago
  I don't that its that simple. For awhile now, YouTubers have "labels" too, they just don't use that term. One of the "labels" was bought for a fairly large sum by Disney.
- narrator 11y ago
  I listen to a lot of music off the Ektoplazm (http://www.ektoplazm.com/ http://www.ektoplazm.com/) label. It's not all great, but I like about 20% to 30% of and maybe 10% is excellent. It's all released free under a creative commons license. I don't even know what pop music is these days since I don't watch TV or listen to the radio. Music, like a long distance telephone call, is basically free now. Technology has made these things incredibly cheap and the people who used to make money off this stuff have to find ways to restrict the supply using lobbying and lawsuits in order to make a profit. I think other industries are allowed to die a quicker death because they aren't so tied into the big media companies which have a lot of political power.
- Zach_the_Lizard 11y ago
  >Artists getting a 10-20% slice[1], the typical revenue-split, sounds like a rip-off to me. SoundExchange normally pays something like 50% to the copyright holder, 45% to the 'featured artist' and 5% to session musicians and the like for performance royalties (which is what it pays out for). [1] SoundExchange is the organization set up to distribute royalties when performance royalties were brought to the US. They only are paid, and thus pay out for, digital music streaming, including cable TV, streaming radio like Pandora (when using the statutory license), and satellite radio. In the case of an indie group that also owned the copyright, at least 95% of the royalties would flow to the members of the group itself. I should note that there are other organizations like SoundExchange worldwide. PPL [2] is the British equivalent. There are also other organizations that deal with different rights, e.g. rights to the sheet music. The laws regarding each will vary considerably. [1] http://www.soundexchange.com/artist-copyright-owner/digital-royalties/ http://www.soundexchange.com/artist-copyright-owner/digital-... [2] http://www.ppluk.com/ http://www.ppluk.com/
devindotcom 11y ago
FYI, it's not class action yet and the $150m is the maximum based on the statutory damages the complainant details. I'm not a lawyer, the headline just seems to kind of jump the gun a little.
shortformblog 11y ago
David Lowery has a history of doing stuff like this. I love his music, but he's become a bit of a troll on this issue in recent years. (See his blog The Trichordist: http://thetrichordist.com/ http://thetrichordist.com/) His most recent post does a pretty good job of pointing out where he stands on this issue: http://thetrichordist.com/2015/12/24/the-mother-of-all-friday-news-dumps-spotify-admits-it-has-an-unpaid-royalty-problem/ http://thetrichordist.com/2015/12/24/the-mother-of-all-frida... Personally, I want to see Lowery make a few more bucks off of "Eurotrash Girl" and "Take the Skinheads Bowling," but his approach to the issue seems to have a take-no-prisoners vibe to it, which is too bad because it sort of undercuts a lot of the fairly valid points he might have. He's not afraid of going after listeners, which is a bummer because the listeners are probably less at fault in this case than the labels are. (He also looks like an older Chuck Johnson these days, which doesn't help matters on that front.) No matter the complaints about tone or anything like that, we definitely need guys like Lowery making the case for artists. But he might win more support if he were to take some style tips from Taylor Swift [1] on the issue. Swift has done more on this whole issue than Lowery has and she hasn't once had to resort to making fun of an intern who doesn't buy CDs.[2] [1] http://www.techtimes.com/articles/75173/20150813/taylor-swift-attacks-spotify-again-while-praising-apple.htm http://www.techtimes.com/articles/75173/20150813/taylor-swif... [2] http://www.stereogum.com/1069672/david-lowery-on-file-sharing/news/ http://www.stereogum.com/1069672/david-lowery-on-file-sharin...
davidgerard 11y ago
This looked plausible until I saw it was David Lowery. I predict this will go nowhere.
bryanlarsen 11y ago
What is the purpose of copyright? From the constitution "to promote the progress of science and the useful arts". To maximize the creation of intellectual goods, we should pay artists enough money to have them enthusiastically create them, but no more. Of course, this money should only get paid to people who are creating works that people want to consume. Our music copyright system has many problems, but I think it's fairly remarkable that we've stumbled on what I believe is fair prices for it: $10/mo/user or $15/mo/family for access to a full catalog, or ad-supported free for access to radio-like streaming. Ad-supported free is pretty meagre, but it was the government that set those rates, so we'll assume that's fair for the sake of this argument. While dividing that $10/mo up by play seems fair, it doesn't seem maximal. A few artists get millions, most are lucky to get enough to get enough to buy a cup of coffee. They might be making a meagre living touring, but once they decide to have a family they give it up and get a real job. I'd love to see log scaled payouts to address the problem. So if you A had 10x as many plays as B and 100x as many plays as C, A would get paid 2x as much as B and 3x as much as C. (using log10 for illustration -- the natural logarithm or some other lower base would probably be better). Such a change would be relatively easy to make for compulsory-licensed music such as Pandora and other "Internet Radio". It would be harder to make for the voluntarily-licensed music such as Spotify, though.
yzh 11y ago
Actually I have a question regarding spotify's payment model: I heard that every subscriber's payment are put in a big pool, and artists are paid according to their global click/listening rank. If this were true, then when I pay 10 dollar's per month and all I listen to is Carsick Cars (my favorite Chinese indie band), still the majority of 10 dollars will go to Justin Bieber and Adele. Is that right? Another model is to pay the artist according to each subscriber's stats. For example in my previous example, all my payment (except those for Spotify) will go to Carsick Cars. Additionally, I'm wondering which of the above payment model is fair to both the audience and the artists?
- zik 11y ago
  If all you listen to is Carsick Cars then their global ranking will be boosted and assuming that you listen an average amount all your royalty money will go to Carsick Cars. If you listen a greater than average amount then even more money will go to them.
  - bsdetector 11y ago
    There's a minimum payout, so unless you listen to your neighborhood band a lot then they still get nothing and all of your $10 goes to bands you never even listened to. The Spotify model even encourages people to not listen to music. Putting your music library on shuffle and turning off the speakers is the best way for a paying subscriber to get money to the bands they like. Streaming an excessive amount on mute also takes money from other bands that you don't like and redirects it to your favorites. Even better, sign up for an ad-supported account, play your favorites on mute, and the artists will get even more money per play. It's a terrible model that rewards people for abusing it. Splitting your $10 among your bands is a much better model, but they won't do it because ads don't pay enough so they mix together ads and paid accounts so they can get more listeners. Spotify model is good for Spotify, but not for anybody else.
- Flimm 11y ago
  If this sentence is true: > when I pay 10 dollar's per month and all I listen to is Carsick Cars (my favorite Chinese indie band), still the majority of 10 dollars will go to Justin Bieber and Adele ... then it's also true that millions of subscribers are paying a tiny fraction of their subscription fee to Carsick Cars, even though they never listen to their music. Mathematically, it's equivalent (I think) to you paying your entire subscription fee to Carsick Cars, and nobody else paying them anything. But the wording of one sounds fairer for some reason. (It gets more complicated once you consider that some users are putting less money because they're on the ad-supported subscription.)
brownbat 11y ago
We've hit a weird period where if I hear about a song, like Lowery's Almond Grove, I can instantly listen to that song on demand on a legal service without paying anything. (I don't even get a pre-roll video ad.) The underlying economics here have changed from the 90s. Partly because of all the price fixing back then,[0] but mostly things have changed along the lines any economist would have predicted, once you add instant free duplication and teleportation of bits to the world.[1] A right is a right, and Lowery makes great stuff so I want him to get some return. But it seems like he keeps starting fights with all the places trying new business models, trying desperately to fight against the economics. He's picking fights with the few holdouts still trying to trade music for actual money. He's capsizing all the lifeboats because he's angry at the sinking ship. It's like he doesn't understand he's at sea. [0] http://usatoday30.usatoday.com/life/music/news/2002-09-30-cd-settlement_x.htm http://usatoday30.usatoday.com/life/music/news/2002-09-30-cd... [1] ie, Price tends towards marginal cost. Overly simplistic maybe, but this is an awfully provocative case study: negligible marginal cost and pricing at effectively nothing.
merb 11y ago
The problem with all the music platforms and labels is that all platforms made a wrong decision when saying we are licensing all this stuff. They should've just done a platform where the label needs to pay and could upload the stuff. Something like "pay X per uploaded song and X per traffic done", but get the rest off the revenue of the song. However at the moment the royalties stuff is way more complicated than it should be.
jupiter90000 11y ago
Has anyone seen a link to the actual document filed to court for the lawsuit? I'd like to see it if so. Typically in class actions the lawyers take home the bulk of the settlement, with those actually affected taking home small amounts (except for perhaps named plaintiffs, with higher 'reward' payments than others in the class).
2close4comfort 11y ago
David Lowrey has a pretty long history of hating on digital media and while some is very well founded, some is "Hey you kids back in my day..." BS. I think he is someone that was comfortable in the old business and doesn't want the burden of selling placed on him and wants the Label to sell. But now if you are clever you can find ways to both have a traditional arrangement and appeal directly to your fans who would gladly help support him.

161 points by sageabilly 11y ago

I have mixed feelings about this particular case, because on the one hand, yes, I want artists compensated fairly, and on the other hand, I do hold the belief that Spotify is putting a good-faith effort towards paying musicians and "rights holders" day in and day out. I'd like to see this case actually go to court, if anything so that it would force all three parties - Lowrey, His Label(s)/Management/Publisher(s), and Spotify - to provide some documentation regarding how this system actually works. My understanding, for good or ill, is that Spotify points the finger at royalty collection societies / labels / publishers / etc when possible (and not forbidden by contract or NDA), and royalty collection societies / labels / publishers / etc tell artists to blame Spotify. I'm not fond of the murky arrangements what so ever! Getting a good, clear understanding of the mechanics would be nice, well, for other artists like Lowery. Could this case show that Lowery's own management and labels haven't been doing their part to get him his money? I'm curious. Will the case ever go to court, or is it maybe more of an avenue to try and get a settlement check? I could see that happening too. I might be in the minority as an independent, but I've been quite pleased with the reporting and transparency by Spotify, iTunes, et al by way of my distribution firm, and therefore have no real basis to feel compelled to try and join the suit.

s73v3r 11y ago
Good faith is one thing, but at the end of the day, if they're not paying what they owe, then they shouldn't be able to continue using the stuff.
sparky_ 11y ago
Have the streaming services made it any easier of late for a indie musician to publish their works? I'm several years out of date, but I remember at one point I'd looked into it, and the closest you could get to self-publishing was to go through an indie distributor like CD Baby. But at no point could you actually upload MP3 files and album information directly to Spotify.
- 6stringmerc 11y ago
  Still have to go through a distributor to get on Spotify, but Pandora has a different system requiring submission and review.
josh2600 11y ago
For context: http://www.theverge.com/2015/5/19/8621581/sony-music-spotify-contract http://www.theverge.com/2015/5/19/8621581/sony-music-spotify...
- 6stringmerc 11y ago
  An excellent point of reference for sure. I've reviewed that in the past and I'm pretty comfortable thinking the consensus by musicians was "Wow, Sony really throws its weight around and gets everything it can for itself and only bothers with artists when it actually has to pay them legally" which, all kidding aside, is kind of what a lot of people do (or should) expect of recording industry practices. As in tenths of tenths of a cent: >Some artists have clauses in their contracts to get a larger share of the streaming revenue, and some artists are still operating under CD-era contracts that only give them 15–20 percent of their streaming revenues. I don't think it's right to lift the entirety of the comment from over at the Billboard site, but one person has already noted the Copyright when the files were on Spotify were attributed to what appears to be Lowery's label at the time. It's an interesting bit of investigation that I'm sure the Spotify team would pursue. I do get the feeling that Lowery doesn't have much of a "willful infringement" case when Spotify is, by outward appearances, setting aside proper monies to pay out when they get the right information. If that turns out to make Lowery's label look bad for agreeing to allow streaming and agreeing to the compensation being offered by Spotify (against his wishes?), I won't be surprised really.
Avenger42 11y ago
Yeah, it makes me wonder whether his complaint is really with his label, but he can't sue his label without creating friction. So he sues Spotify, Spotify performs discovery which shows his own label is withholding these royalties, he turns around and sues his label (or more likely, settles with them). Better still - what if Spotify turns out to be right, and he didn't provide the required information to Spotify to allow them to pay him his royalties, so his complaint is really with himself?
- 6stringmerc 11y ago
  Agreed! I don't think there's any chance he could get a class action status against his own label, but he successfully got out in public quite a while ago bitching about how he made roughly $17 for a milllion streams of "Low" and that got his profile up. My gut instinct is that the "willful infringement" isn't going anywhere, and after a critical breakdown of accounting, Lowery is probably owed another check that could buy him lunch at Chili's. This doesn't seem anything close to the kind of heavyweight punch that Eminem threw at Universal over royalties. You're right though, if he's at fault for not getting himself paid, that'd get a chuckle out of me, and also another facepalm for an instance of a musician who should stick to the music part and not the businessman/activist part.
  - bsder 11y ago
    I suspect that the main point is to drag the accounting into the light. Both Spotify and the record companies are going to be in for a shellacking if they let this go to trial given that both of those parties are carrying on some very shady money games.
  - deleted 11y ago
    [deleted]
- Caprinicus 11y ago
  Then he must sue himself
mbucc 11y ago
> I do hold the belief that Spotify is putting a good-faith effort towards paying musicians and "rights holders" day in and day out. The NPR piece said they asked a copyright laywer to look up the copyright for that song, and it took ten minutes (the copyright holder had filed a copyright). Based on that piece, if I was the judge and jury, I would expect a company valued at over $8B to have done a better job, especially given how the penalties are structured. His song was played over 20,000 times, for which he received no compensation. IIRC, the NPR piece said the max penalty is $150k per infringement. Ouch.
LargeCompanies 11y ago
The record companies collectively own a 20 percent stake in Spotify. Thus and per their record of swindling their artists I don't have much faith in Spotify not following similar tactics. This is a just case!
TheCondor 11y ago
Wouldn't good faith be to remove it from their catalog until they could properly purchase it?

callesgg 11y ago

My understanding was/is that spotify goes in to agreements width record labels and the record labels provide spotify with music. If i am right about that, then the record label that provided the music would be at fault. As they sold material that they did not have the rights to sell. I guess you could find them at fault as they are not verifying what they are getting. But that would not be a civil case.

dpkp 11y ago
Labels deal in sound recordings, which have historically been licensed independently of the underlying music compositions. Most distributors like Spotify will obtain separate licensing for compositions, whether from collecting societies like ASCAP, BMI, or SESAC, and/or through direct deals with artist / publishers themselves. This setup may seem odd, but but it has historically been used to provide some protection against labels "screwing" artists - b/c although a label takes the sound recording rights and therefore controls royalty payments back to artists for the recording [if any -- after recoupment, etc], the artist typically retains their own publishing rights and can license those separately for $$ not subject to their label deal (though subject to cuts from societies, and their individual deals with publishers etc). This opens up new revenue streams for artists to get paid outside the control of their label: by radio stations/bars/restaurants via PROs, or in sync-right deals for placement in movies or on TV.

iamleppert 11y ago

Is music really worth this much? I mean, its intrinsic value to society? It's normally used as the backdrop to a party, or exercising, or some other such thing, but really, $150,000 per song? Why can't we put a clamp on the problem of every random artist thinking they've created something that lasts a few minutes and has more value than most people make in a year? The entire system of copyright and recorded art needs to be abolished, and any music that is recorded instantly becomes the public domain. This would do away with many industries that serve almost no purpose for society, other than to attempt to extract value where no value has been created. The conventional way for artists to make money should come from performance.

s73v3r 11y ago
Those are punitive damages. So it's not just the value, but there's also a punishment in there. If you only had to pay the 99 cents or whatever per infringement, then no one would care, because you wouldn't have to pay much if you got caught. "The conventional way for artists to make money should come from performance." Who are you to say how someone else should make money?
jMyles 11y ago
I wholeheartedly disagree with your assessment of the value of music (I think it might be the most valuable contribution our species makes to the universe), but I do agree with your solution.
- eugenekolo2 11y ago
  As somebody who enjoys music every day, attends live performances, and keeps up to date with some music blogs. I think it's an over assessment to call music the most valuable contribution our species makes to the universe. Nevermind the fact that we have no clue what our contribution is at all in the universe. Music is good, it's shaped societies, and the like, but so have many other things, and I don't think our species would've died off without music. TBH I think most people would barely notice after a little bit if music just disappeared.
- Natsu 11y ago

sandstrom 11y ago

Record labels was useful historically, because they handled distribution (physical stores, CDs, different countries). Nowadays, record labels are a PR-agency at best and should be compensated as such. Artists getting a 10-20% slice[1], the typical revenue-split, sounds like a rip-off to me. A good artist, using Instagram/YouTube/FB/website + Spotify/Rdio for distribution doesn't need much help from a label. Sure, a producer, studio, PR manager and other staff is useful, but that doesn't motivate a 90% cut of profits (in my view). [1] http://www.wsj.com/articles/artists-press-for-their-share-1405905178 http://www.wsj.com/articles/artists-press-for-their-share-14...

dpkp 11y ago
But the article is about music publishers, not music labels.
dinkumthinkum 11y ago
I don't that its that simple. For awhile now, YouTubers have "labels" too, they just don't use that term. One of the "labels" was bought for a fairly large sum by Disney.
narrator 11y ago
I listen to a lot of music off the Ektoplazm (http://www.ektoplazm.com/ http://www.ektoplazm.com/) label. It's not all great, but I like about 20% to 30% of and maybe 10% is excellent. It's all released free under a creative commons license. I don't even know what pop music is these days since I don't watch TV or listen to the radio. Music, like a long distance telephone call, is basically free now. Technology has made these things incredibly cheap and the people who used to make money off this stuff have to find ways to restrict the supply using lobbying and lawsuits in order to make a profit. I think other industries are allowed to die a quicker death because they aren't so tied into the big media companies which have a lot of political power.
Zach_the_Lizard 11y ago
>Artists getting a 10-20% slice[1], the typical revenue-split, sounds like a rip-off to me. SoundExchange normally pays something like 50% to the copyright holder, 45% to the 'featured artist' and 5% to session musicians and the like for performance royalties (which is what it pays out for). [1] SoundExchange is the organization set up to distribute royalties when performance royalties were brought to the US. They only are paid, and thus pay out for, digital music streaming, including cable TV, streaming radio like Pandora (when using the statutory license), and satellite radio. In the case of an indie group that also owned the copyright, at least 95% of the royalties would flow to the members of the group itself. I should note that there are other organizations like SoundExchange worldwide. PPL [2] is the British equivalent. There are also other organizations that deal with different rights, e.g. rights to the sheet music. The laws regarding each will vary considerably. [1] http://www.soundexchange.com/artist-copyright-owner/digital-royalties/ http://www.soundexchange.com/artist-copyright-owner/digital-... [2] http://www.ppluk.com/ http://www.ppluk.com/

devindotcom 11y ago

FYI, it's not class action yet and the $150m is the maximum based on the statutory damages the complainant details. I'm not a lawyer, the headline just seems to kind of jump the gun a little.

shortformblog 11y ago

David Lowery has a history of doing stuff like this. I love his music, but he's become a bit of a troll on this issue in recent years. (See his blog The Trichordist: http://thetrichordist.com/ http://thetrichordist.com/) His most recent post does a pretty good job of pointing out where he stands on this issue: http://thetrichordist.com/2015/12/24/the-mother-of-all-friday-news-dumps-spotify-admits-it-has-an-unpaid-royalty-problem/ http://thetrichordist.com/2015/12/24/the-mother-of-all-frida... Personally, I want to see Lowery make a few more bucks off of "Eurotrash Girl" and "Take the Skinheads Bowling," but his approach to the issue seems to have a take-no-prisoners vibe to it, which is too bad because it sort of undercuts a lot of the fairly valid points he might have. He's not afraid of going after listeners, which is a bummer because the listeners are probably less at fault in this case than the labels are. (He also looks like an older Chuck Johnson these days, which doesn't help matters on that front.) No matter the complaints about tone or anything like that, we definitely need guys like Lowery making the case for artists. But he might win more support if he were to take some style tips from Taylor Swift [1] on the issue. Swift has done more on this whole issue than Lowery has and she hasn't once had to resort to making fun of an intern who doesn't buy CDs.[2] [1] http://www.techtimes.com/articles/75173/20150813/taylor-swift-attacks-spotify-again-while-praising-apple.htm http://www.techtimes.com/articles/75173/20150813/taylor-swif... [2] http://www.stereogum.com/1069672/david-lowery-on-file-sharing/news/ http://www.stereogum.com/1069672/david-lowery-on-file-sharin...

davidgerard 11y ago

This looked plausible until I saw it was David Lowery. I predict this will go nowhere.

bryanlarsen 11y ago

What is the purpose of copyright? From the constitution "to promote the progress of science and the useful arts". To maximize the creation of intellectual goods, we should pay artists enough money to have them enthusiastically create them, but no more. Of course, this money should only get paid to people who are creating works that people want to consume. Our music copyright system has many problems, but I think it's fairly remarkable that we've stumbled on what I believe is fair prices for it: $10/mo/user or $15/mo/family for access to a full catalog, or ad-supported free for access to radio-like streaming. Ad-supported free is pretty meagre, but it was the government that set those rates, so we'll assume that's fair for the sake of this argument. While dividing that $10/mo up by play seems fair, it doesn't seem maximal. A few artists get millions, most are lucky to get enough to get enough to buy a cup of coffee. They might be making a meagre living touring, but once they decide to have a family they give it up and get a real job. I'd love to see log scaled payouts to address the problem. So if you A had 10x as many plays as B and 100x as many plays as C, A would get paid 2x as much as B and 3x as much as C. (using log10 for illustration -- the natural logarithm or some other lower base would probably be better). Such a change would be relatively easy to make for compulsory-licensed music such as Pandora and other "Internet Radio". It would be harder to make for the voluntarily-licensed music such as Spotify, though.

yzh 11y ago

Actually I have a question regarding spotify's payment model: I heard that every subscriber's payment are put in a big pool, and artists are paid according to their global click/listening rank. If this were true, then when I pay 10 dollar's per month and all I listen to is Carsick Cars (my favorite Chinese indie band), still the majority of 10 dollars will go to Justin Bieber and Adele. Is that right? Another model is to pay the artist according to each subscriber's stats. For example in my previous example, all my payment (except those for Spotify) will go to Carsick Cars. Additionally, I'm wondering which of the above payment model is fair to both the audience and the artists?

zik 11y ago
If all you listen to is Carsick Cars then their global ranking will be boosted and assuming that you listen an average amount all your royalty money will go to Carsick Cars. If you listen a greater than average amount then even more money will go to them.
- bsdetector 11y ago
  There's a minimum payout, so unless you listen to your neighborhood band a lot then they still get nothing and all of your $10 goes to bands you never even listened to. The Spotify model even encourages people to not listen to music. Putting your music library on shuffle and turning off the speakers is the best way for a paying subscriber to get money to the bands they like. Streaming an excessive amount on mute also takes money from other bands that you don't like and redirects it to your favorites. Even better, sign up for an ad-supported account, play your favorites on mute, and the artists will get even more money per play. It's a terrible model that rewards people for abusing it. Splitting your $10 among your bands is a much better model, but they won't do it because ads don't pay enough so they mix together ads and paid accounts so they can get more listeners. Spotify model is good for Spotify, but not for anybody else.
Flimm 11y ago
If this sentence is true: > when I pay 10 dollar's per month and all I listen to is Carsick Cars (my favorite Chinese indie band), still the majority of 10 dollars will go to Justin Bieber and Adele ... then it's also true that millions of subscribers are paying a tiny fraction of their subscription fee to Carsick Cars, even though they never listen to their music. Mathematically, it's equivalent (I think) to you paying your entire subscription fee to Carsick Cars, and nobody else paying them anything. But the wording of one sounds fairer for some reason. (It gets more complicated once you consider that some users are putting less money because they're on the ad-supported subscription.)

brownbat 11y ago

We've hit a weird period where if I hear about a song, like Lowery's Almond Grove, I can instantly listen to that song on demand on a legal service without paying anything. (I don't even get a pre-roll video ad.) The underlying economics here have changed from the 90s. Partly because of all the price fixing back then,[0] but mostly things have changed along the lines any economist would have predicted, once you add instant free duplication and teleportation of bits to the world.[1] A right is a right, and Lowery makes great stuff so I want him to get some return. But it seems like he keeps starting fights with all the places trying new business models, trying desperately to fight against the economics. He's picking fights with the few holdouts still trying to trade music for actual money. He's capsizing all the lifeboats because he's angry at the sinking ship. It's like he doesn't understand he's at sea. [0] http://usatoday30.usatoday.com/life/music/news/2002-09-30-cd-settlement_x.htm http://usatoday30.usatoday.com/life/music/news/2002-09-30-cd... [1] ie, Price tends towards marginal cost. Overly simplistic maybe, but this is an awfully provocative case study: negligible marginal cost and pricing at effectively nothing.

merb 11y ago

The problem with all the music platforms and labels is that all platforms made a wrong decision when saying we are licensing all this stuff. They should've just done a platform where the label needs to pay and could upload the stuff. Something like "pay X per uploaded song and X per traffic done", but get the rest off the revenue of the song. However at the moment the royalties stuff is way more complicated than it should be.

jupiter90000 11y ago

Has anyone seen a link to the actual document filed to court for the lawsuit? I'd like to see it if so. Typically in class actions the lawyers take home the bulk of the settlement, with those actually affected taking home small amounts (except for perhaps named plaintiffs, with higher 'reward' payments than others in the class).

2close4comfort 11y ago

David Lowrey has a pretty long history of hating on digital media and while some is very well founded, some is "Hey you kids back in my day..." BS. I think he is someone that was comfortable in the old business and doesn't want the burden of selling placed on him and wants the Label to sell. But now if you are clever you can find ways to both have a traditional arrangement and appeal directly to your fans who would gladly help support him.