Spotify faces $1.6 billion lawsuit
Could this change licensing laws?
For music, the monetization of the art form has led to an ever-expanding, multi-trillion dollar industry that adds new challenges and limitations to the way it is consumed by the public. In the late 1990s, Napster opened a new wave of music-streaming services and introduced a way to enjoy music without committing to purchasing it. Consequently, with the rise of streaming services like Pandora and Spotify, more people are opting to stream music rather than own it through album or other song purchases. Despite increasing the accessibility and enjoyment of music for all, there are inevitable grievances experienced from the gains of the music industry.
Streaming services traditionally attain licensing deals from record labels in order to host music on their service platforms. These deals expire at different times and must be renewed in order for the streaming service to maintain access to the music it allows users to stream.
The advantage of streaming services negotiating directly with record labels is that it consistently satisfies public demand to make music available, while still being profitable for both the streaming service—through customer subscriptions—and to the record label through million-dollar licensing deals. But this seemingly foolproof system of profit in the music industry is still blighted by inconsistencies.
On Dec. 29, 2016, Wixen Music Publishing filed a lawsuit against Spotify. Artists and clients of Wixen Music are suing Spotify on claims that Spotify has been hosting songs and albums from artists that Wixen represents without first getting a license to stream the music, including artists ranging from Tom Petty to The Doors. Aside from the $1.6 billion compensation that Spotify may have to pay if it loses the suit, other consequences include the removal of more than 10,000 songs from the streaming service, as well as royalties to all music available going forward. Considering the weight of the lawsuit and future royalty payments, the freedom and affordability of the streaming service is under threat. With Spotify lacking the rights to these songs, not only will users suffer from the sudden removal of some of their favorite songs, but more importantly, the artists have suffered by not receiving credit or payment for song rights and licenses.
Ultimately, the Spotify lawsuit may change the licensing methods and laws in the music industry. Additionally, with the results of the lawsuit possibly impacting many users who have songs by the artists under the Wixen Music Publishing label on their “Favorites” playlist, the lawsuit will increase the visibility of conflicts in the music industry and licensing laws.