Music streaming giant Spotify is currently facing a lawsuit in a US federal court, accusing the company of underpaying songwriters, composers, and publishers by tens of millions of dollars. The Mechanical Licensing Collective (MLC), a non-profit organization responsible for collecting and distributing royalties from music streaming services, filed the lawsuit in New York. The suit claims that Spotify made changes to its paid subscription services on March 1 without prior notice, resulting in a nearly 50 percent reduction in royalty payments to MLC.

According to the MLC, Spotify’s failure to meet its statutory obligations has significant financial implications for songwriters and music publishers. The impact of Spotify’s alleged underpayment could amount to hundreds of millions of dollars if left unchecked. The reclassification of Spotify’s Premium Individual, Duo, and Family subscription plans as Bundled Subscription Offerings due to the inclusion of audiobooks has led to a decrease in royalties paid out to rights holders.

In response to the lawsuit, Spotify emphasized that the terms in question were agreed upon by publishers and streaming services years ago. The company stated that it paid a “record amount” in royalties last year and is projected to pay out an even larger sum in 2024. Spotify defended its actions by claiming that Premium subscribers already had access to audiobooks and that no additional services were bundled with the subscription.

The allegations against Spotify highlight the ongoing challenges faced by songwriters, composers, and music publishers in the digital streaming era. With streaming platforms dominating the music industry, ensuring fair compensation for rights holders has become a pressing issue. The outcome of the lawsuit against Spotify could set a precedent for how streaming services uphold their obligations to pay royalties to creators.

The lawsuit against Spotify serves as a reminder of the complex relationship between streaming platforms and music creators. As the digital music landscape continues to evolve, it is crucial for all parties involved to work towards a fair and transparent system of royalty distribution. The outcome of this legal battle will undoubtedly have far-reaching implications for the future of music streaming and the livelihoods of those who contribute to its creation.


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