Two independent music publishers filed separate lawsuits Tuesday in Nashville against streaming giant Spotify for failing to obtain the appropriate licenses to thousands of songs.
The plaintiffs in the lawsuit are Bluewater Music Services, a Nashville-based publisher and music catalog administrator, and Bob Gaudio, a publisher and primary songwriter for the band Frankie Valli and the Four Seasons.
Among the songs Bluewater says Spotify did not license properly are Miranda Lambert's "Gunpowder & Lead" and "White Liar"; Willie Nelson's "Living in the Promiseland"; Kenny Chesney's "Better As a Memory" and "Anything But Mine"; and Guns 'N Roses' "Yesterdays."
The publishers claim Spotify didn’t follow proper protocol to obtain compulsory licenses for their compositions, and therefore has been streaming the songs illegally — an argument used in other music streaming lawsuits.
Spotify declined to comment.
Spotify has been hit with at least two other prominent lawsuits making identical claims. One came from the National Music Publishers Association, and another from a group of songwriters led by David Lowery, the former singer-songwriter for the alt-rock bands Cracker and Camper Van Beethoven. Lowery is now a college professor at the University of Georgia and a vocal advocate for creators’ rights in the age of digital music.
Spotify entered into settlement agreements with the NMPA and with Lowery’s group, which was a class-action lawsuit. Those lawsuits opened the door for thousands of songwriters and music publishers to cash in, via the settlements. Spotify says its music publishing problems stem in part from the complicated work of tracking the metadata that identifies the proper copyright owners for each song.
The new lawsuits indicate that Spotify may only be in the infancy of addressing the problems and may also face a cavalcade of legal disputes with independent music publishers.
Bluewater and Gaudio are represented by entertainment law heavyweight Richard Busch, who is based in Nashville. The new lawsuits are also the first to be filed in Nashville, whereas the previous suits were out of New York federal court.
The NMPA settlement with Spotify was for $30 million, and Lowery’s class-action suit settled for $43.4 million.
Busch argued in the recent lawsuits that those settlements were unfairly low. He noted that the largest members of the NMPA are the major publishing companies Universal, Sony and Warner, whose parent companies also own a combined 18% of Spotify, according to the lawsuit.
The lawsuits compared Spotify to Napster, the file-sharing service that became popular in the late 1990s by making unlicensed songs widely available.
"As we say in the Complaint, songwriters and publishers should not have to work this hard to get paid, or have their life work properly licensed, and companies should not be allowed to build businesses on the concept of infringe now and ask questions later,” Busch said in prepared remarks. “We look forward to litigating these cases."
Bluewater's lawsuit claims that the three major music companies, which also own prominent record label divisions, stand to make $700 million each if Spotify has a public offering. Spotify is preparing a listing on the NYSE for later this year or early next, sources have told Reuters.
“In addition, the NMPA settlement did nothing to resolve the outstanding issues with the Spotify licensing and royalty payment system as the settlement allowed Spotify to continue to not pay accurately and did not require it to build any systems moving forward,” the Bluewater lawsuit states.
Bluewater claims Spotify has illegally posted 2,339 songs from its catalog. Gaudio claims 106 songs from his catalog were posted illegally. The hit song "December, 1963 (Oh What a Night)," which Gaudio co-wrote, is among the Franki Valli and the Four Seasons hits listed as not being properly licensed in an exhibit attached to the lawsuit. That song has over 57 million streams on Spotify.
Under U.S. music copyright law, a streaming service like Spotify does not need to negotiate royalty deals with each music publisher whose music it would like to use. Spotify can simply notify the publisher of its intent to use the songs. If Spotify can’t identify the owner of a composition’s copyright, it may post a notice with the U.S. Copyright Office.
Bluewater and Gaudio claim Spotify didn’t provide proper notice and continued to use their songs. Each party sent Spotify requests asking for proof of the license and then cease and desist notices.
In the previous lawsuits, Spotify spelled out the difficulty of identifying and contacting each publisher associated with the approximately 30 million songs available on its streaming service. The company, which is the worldwide leader in subscription streaming, boasts more than 140 million active users and more than 50 million subscribers.
As part of its settlement agreement in the class action lawsuit brought by Lowery, Spotify agreed that it “will work collaboratively to improve the gathering and collecting of information about composition owners to help ensure those owners are paid their royalties in the future."
Legwork for Gaudio’s lawsuit was done by Audiam, the administrative service that helps copyright owners track royalties owed by digital music services. In prepared remarks, Audiam founder Jeff Price blasted Spotify for building its business on the backs of songwriters and publishers who have not been paid for their work. According to the lawsuit, Audiam sent Spotify written communications seeking to help the company identify the songs that were posted without licenses, but Spotify did nothing in response.
“It's not a confusing requirement; if you want to use someone else's music to build your business, get a license and then pay for that use,” Price said.
The lawsuits are seeking the maximum $150,000 for each unlicensed work in damages.