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Spotify’s India Launch Hits Snag as Warner Music Sues

UPDATED: Spotify’s long-anticipated launch in India could be days away, but the Swedish company is taking its licensing negotiations with the three major music groups to the wire. While the streamer says it has closed licensing deals with Universal Music Group and Sony Music, it remains “far apart” from acceptable terms with Warner Music Group.

As a workaround, Spotify is claiming a statutory license meant for TV and radio broadcasters; in response, Warner filed an injunction in India that aims to bar Spotify’s access to songs published by the major’s Warner/Chappell company, which holds the rights to more than 1 million songs. The dispute has become contentious as Spotify accused Warner of “abusive behavior” that harms “many non-Warner artists, labels and publishers.”

In a statement to Variety, a Warner Music spokesperson says: “After months of negotiations, Spotify abruptly changed course and has falsely asserted a statutory license for our songwriters’ music publishing rights in India. We had no choice but to ask an Indian court for an injunction to prevent this. It’s our goal to hammer out a deal that works for everyone. We hope this is just a speed bump in the expansion of our long and successful global partnership.”

A Spotify spokesperson responded: “Warner Music Group instructed Warner/Chappell Music to file for an injunction in an attempt to leverage WCM’s local Indian publishing rights, to extract concessions in WMG’s global renewal negotiations for musical recordings. WMG revoked a previously agreed upon publishing license for reasons wholly unrelated to Spotify’s launch in India. All other major labels and publishers have already agreed on economics and to license their music, and Spotify has also entered into a license with the local collecting society, while WCM remains the lone hold-out needed for a Spotify launch in India. WMG’s abusive behavior would harm many non-Warner artists, labels and publishers, and prevent Spotify from competing in the market, leaving us no choice but to file for a statutory license. This statutory license, which allows for application to internet-based services, prevents WMG’s abusive practices, while ensuring all rights holders are compensated fairly. Under the statutory license, Spotify will pay WCM and their rights holders rates that are in-line with the rates Spotify agreed to pay the leading Indian music entities. We will continue to assess our options at this stage.”

Spotify’s launch in India, the world’s second most-populous country, has already been postponed at least twice, and the delay is not helping the company’s reputation on Wall Street; Spotify’s stock has dropped significantly, along with most major tech companies, since its its successful public listing last April. Warner has less than 5% market share in India, and the majors are significantly less dominant in that country than they are in most Western countries, although Warner/Chappell publishes songs on multiple labels. While the announcement in January that Spotify has inked a content deal with T-Series, the country’s leading music and film company, ensures that it will be rolling out with plenty of popular content, the importance of securing deals with the majors seems to be reflected in the strong language in its statement.

Just before Spotify’s public listing in April of 2018, the company announced that it had opened an office in Mumbai and hired 300 people, but it faces a steep challenge in India. In addition to the fierce competition from local streamers like Saavn and Gaana (which sources say Spotify had considered purchasing in the past), Spotify could be staring down a potentially slow conversion from free to premium, and large sections of the country have broadband difficulties; although Internet access is inexpensive in India, infrastructure is still developing in many areas. However, Spotify faced similar challenges in Indonesia and Africa, and launched in those territories anyway.

India, a country with 1.33 billion people and dozens of dialects, consumes music in five languages including Punjabi, Tamil, Telugu, Malayalam and Bengali.

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