3 ms·

> In May, the Stockholm, Sweden-based company agreed to pay more than $43 million to settle a proposed class action alleging it failed to pay royalties for some

by alehul 9y ago

> In May, the Stockholm, Sweden-based company agreed to pay more than $43 million to settle a proposed class action alleging it failed to pay royalties for some of the songs it makes available to users. This number seems closer to reality. It may be Tom Petty, Neil Young, and the Doors, but they're not worth nearly 10% of Spotify's valuation, and that certainly wouldn't match a compensatory amount in revenue that Spotify failed to pay. Are they aiming for some punitive measure? Or are they going to settle for 5% of this in the near future?

ggg9990 9y ago
That's not how damages work though. A factory worth $1 million can create hundreds of millions of dollars of damages with a spill or accident.
- icebraining 9y ago
  Plus copyright has statutory damages, so they don't even need to prove actual damages.
brudgers 9y ago
My guess is that the amount being sought reflects statutory damages for willful copyright infringement. See https://en.wikipedia.org/wiki/Capitol_Records,_Inc._v._Thomas-Rasset https://en.wikipedia.org/wiki/Capitol_Records,_Inc._v._Thoma...
CPLX 9y ago
> This number seems closer to reality. It may be Tom Petty, Neil Young, and the Doors, but they're not worth nearly 10% of Spotify's valuation Why not? Is there some plausible way to build a $19bn company that lets you listen to music without the works of major globally famous artists? I am willing to agree with you intuitively that this suit is overstating damages as well, but it's definitely not a prima facie argument, you'll have to support that point of view with facts.
- umanwizard 9y ago
  Spotify didn’t have anything by the Beatles for years and it still became very popular.
HenryBemis 9y ago
Is this a shake-down? Or they asking for USD 1.6B, so they can settle at a convenient USD60m? This way the lawyers get a nice 20% cut and Wyxen also gets a decent USD48m which is close to the USD42m that alehul mentioned above.
mbesto 9y ago
> but they're not worth nearly 10% of Spotify's valuation FYI - This is very likely not the metric they're after and so it's probably not helpful to frame against it. Valuation is a measure of the value of the company at any given time. In this case they're seeking damages for revenues that Spotify has made in the past as a result of alleged unlicensed content. If you're trying to scope against Spotify's valuation, then likely you'd be looking at their earnings/profit, which as of reports since October 2017 is still negative. In other words, if there is indeed $1.6B to pay for unpaid royalties, then Spotify's already abysmal financials are going to look even worse.
IncRnd 9y ago
> 1.Wixen brings this action against Spotify for willfully infringing the copyrights in the musical compositions listed in Exhibit A (each a “Work” and collectively the “Works”). Wixen is an independent music publisher and exclusive licensee of the Works, all of which have either been registered or are pending registration with the United States Copyright Office. Spotify is the world’s most dominant music streaming and limited downloading service. As Spotify has publicly admitted, and as recent lawsuits and settlements confirm, Spotify has repeatedly failed to obtain necessary statutory, or “mechanical,” licenses to reproduce and/or distribute musical compositions on its service. Consequently, while Spotify has become a multibillion dollar company, songwriters and their publishers, such as Wixen, have not been able to fairly and rightfully share in Spotify’s success, as Spotify has in many cases used their music without a license and without compensation. 2.A recent proposed settlement involving rights holders and Spotify inthe class action lawsuit Ferricket al. v. Spotify USA Inc. et al.,No. 1:16-cv-8412(AJN) (S.D.N.Y.)(Dkt. # 167-3 (“Proposed Settlement”))does not adequately compensate Wixen or the songwriters it represents. Wixen has and, to the extent not yet effected, will opt out the Works from the Proposed Settlement. From the actual lawsuit. https://www.scribd.com/document/368281292/Wixen-Music-Publishing-Inc-v-Spotify-USA-Inc-Copyright-Infringement#from_embed https://www.scribd.com/document/368281292/Wixen-Music-Publis...

by alehul 9y ago

ggg9990 9y ago

That's not how damages work though. A factory worth $1 million can create hundreds of millions of dollars of damages with a spill or accident.

icebraining 9y ago
Plus copyright has statutory damages, so they don't even need to prove actual damages.

brudgers 9y ago

My guess is that the amount being sought reflects statutory damages for willful copyright infringement. See https://en.wikipedia.org/wiki/Capitol_Records,_Inc._v._Thomas-Rasset https://en.wikipedia.org/wiki/Capitol_Records,_Inc._v._Thoma...

CPLX 9y ago

> This number seems closer to reality. It may be Tom Petty, Neil Young, and the Doors, but they're not worth nearly 10% of Spotify's valuation Why not? Is there some plausible way to build a $19bn company that lets you listen to music without the works of major globally famous artists? I am willing to agree with you intuitively that this suit is overstating damages as well, but it's definitely not a prima facie argument, you'll have to support that point of view with facts.

umanwizard 9y ago
Spotify didn’t have anything by the Beatles for years and it still became very popular.

HenryBemis 9y ago

Is this a shake-down? Or they asking for USD 1.6B, so they can settle at a convenient USD60m? This way the lawyers get a nice 20% cut and Wyxen also gets a decent USD48m which is close to the USD42m that alehul mentioned above.

mbesto 9y ago

> but they're not worth nearly 10% of Spotify's valuation FYI - This is very likely not the metric they're after and so it's probably not helpful to frame against it. Valuation is a measure of the value of the company at any given time. In this case they're seeking damages for revenues that Spotify has made in the past as a result of alleged unlicensed content. If you're trying to scope against Spotify's valuation, then likely you'd be looking at their earnings/profit, which as of reports since October 2017 is still negative. In other words, if there is indeed $1.6B to pay for unpaid royalties, then Spotify's already abysmal financials are going to look even worse.

IncRnd 9y ago

> 1.Wixen brings this action against Spotify for willfully infringing the copyrights in the musical compositions listed in Exhibit A (each a “Work” and collectively the “Works”). Wixen is an independent music publisher and exclusive licensee of the Works, all of which have either been registered or are pending registration with the United States Copyright Office. Spotify is the world’s most dominant music streaming and limited downloading service. As Spotify has publicly admitted, and as recent lawsuits and settlements confirm, Spotify has repeatedly failed to obtain necessary statutory, or “mechanical,” licenses to reproduce and/or distribute musical compositions on its service. Consequently, while Spotify has become a multibillion dollar company, songwriters and their publishers, such as Wixen, have not been able to fairly and rightfully share in Spotify’s success, as Spotify has in many cases used their music without a license and without compensation. 2.A recent proposed settlement involving rights holders and Spotify inthe class action lawsuit Ferricket al. v. Spotify USA Inc. et al.,No. 1:16-cv-8412(AJN) (S.D.N.Y.)(Dkt. # 167-3 (“Proposed Settlement”))does not adequately compensate Wixen or the songwriters it represents. Wixen has and, to the extent not yet effected, will opt out the Works from the Proposed Settlement. From the actual lawsuit. https://www.scribd.com/document/368281292/Wixen-Music-Publishing-Inc-v-Spotify-USA-Inc-Copyright-Infringement#from_embed https://www.scribd.com/document/368281292/Wixen-Music-Publis...