Spotify has reached a deal with the National Music Publishers Association that will let copyright owners claim royalty payments from the streaming-music service for songs lacking ownership information.
Financial terms of the pact were not disclosed. The deal will let publishers and songwriters identify their works and receive money Spotify has set aside for the past usage of so-called unmatched works. In addition, under the agreement Spotify will establish a larger bonus compensation fund for unmatched royalties.
[UPDATED, March 18, 11 a.m. ET: Spotify will pay more than $20 million — and as much as $25 million — to music publishers under the agreement, a source familiar with the deal said. In addition, Spotify is setting aside a pool of $5 million for its past unauthorized use of unmatched songs, the source said. The New York Times previously reported details of the payments.]
“We must continue to push digital services to properly pay for the musical works that fuel their businesses and, after much work together, we have found a way for Spotify to quickly get royalties to the right people,” NMPA president and CEO David Israelite said.
Spotify has had a sometimes rocky relationship with the music industry over the economics of the service. Most famously, Taylor Swift pulled her albums off Spotify more than a year ago because she claimed the company was paying paltry royalty fees.
Under the pact between Spotify and NMPA, any royalties associated with works that remain unmatched after each claiming period will be distributed to publishers and songwriters who participate in the settlement (based on usage on Spotify). However, the agreement will not affect royalties owed to any publisher or writer who does not choose to participate.
“As we have said many times, we have always been committed to paying songwriters and publishers every penny,” Spotify global head of communications and public policy Jonathan Prince said. “We appreciate the hard work of everyone at the NMPA to secure this agreement, and we look forward to further collaboration with them as we build a comprehensive publishing administration system.”