Spotify has defeated a trial from the mechanical license collective It accused the streaming giant for unfairly lowered royalty frequencies as part of its sound musical alternative “Bundling” that was announced last year, according to Billboard. Although MLC claimed that Spotify had “unilaterally and illegally” lowered its music-royaltal payments via the bundle, a federal judge decided that its move is supported by “unequivocal” regulations.
In his decision on Wednesday, judges Analisa said that the rules for federal royalty interest clearly allowed Spotify to legally require the lower interest rate. “Audibook Streaming is a product or service that differs from music flow and has more than token value,” she wrote. “Premium is therefore correctly categorized as a package.” Billboard has estimated that Spotify’s “bundle” would result in the company paying about $ 150 million less in the next year.
Spotify announced in May last year, has confirmed that its Premium plans that combine music and audio books will mean a lower mechanical royalty frequency for songwriters on these plans, although it claims that the revenue for creators will continue to rise.
“Spotify Is about to pay publishers and communities more 2024 than 2023, “claimed it at that time” which our industry partners are conscious, changes in our product portfolio mean that we pay out in different ways based on conditions that both have agreed streaming services and publishers, “Sounds the statement. “Several DSPs have long paid a lower interest rate for bundles compared to an independent music subscription, and our strategy is consistent.” The last sentence refers to plans offered by Amazon – which offers its music flow as part of its Prime service – Apple and others.
While the move was highly criticized by the music publishing society and also led to a legal complaint from the National Music Publisers Assn., Last weekend Universal, the world’s largest music company, and Spotify announced a new, multi -layered business regarding recorded music and publication that sources confirm Amount that the deal improves at least part of the payment structure.
A Spotify representative said in a separate statement, “Spotify maintains its bundle, but with this direct business (with UMPG) it has been developed to report broader rights, including another financial treatment for music and non-music content.”
In its complaint, MLC had claimed that Spotify “incorrectly submitted” the nature of its flow services to secure the lower interest rate.
“The financial consequences of Spotify’s failure to fulfill its statutory obligations are huge for songwriters and music publishers,” it said. “If not controlled, the impact on songwriters and music publishers of Spotify’s illegal under -reporting may encounter hundreds of millions of dollars.”
In response to Wednesday’s decision, a Spotify representative said: “We are satisfied with this result, which shows that Spotify’s premium service, after careful examination of the court, is appropriately categorized as a package and offers valuable content together with music. Bundleer offerings play a crucial role in expanding the interest in paying for music and growing the pie for the music industry. We know that the regulations can be complex, but there is plenty of room for collaboration – and our latest business with UMPG shows how direct licenses can create flexibility and additional benefits. “
Reps for MLC did not immediately respond to the variation’s request for comment.
