Why Independent Music Publishers Should Wait to Join Class Action Against Spotify [MONICA CORTON, DAVID LOWERY]
Today is the last day for music publishers to sign on to participate in the Spotify and NMPA (National Music Publishers Association) settlement agreement. But independent musician and songwriter David Lowery and independent publishing executive Monica Corton have a one-worded piece of advice: WAIT!
Music publisher and songwriter colleagues have been calling us and asking our opinion on what they should do…should they opt in to the NMPA (National Music Publishers Association) Spotify Settlement or wait to participate in the Spotify Class Action. We have said the same thing to all of them, WAIT!
The reasons are very simple. To begin with, if you don’t sign the NMPA Spotify Settlement, Spotify will still owe you those unpaid royalties (and possibly legal fees and statutory damages) regardless of what happens with the class action lawsuit. The NMPA Spotify Settlement cannot wipe out this debt or absolve Spotify of all copyright infringement. Independent publishers and songwriters really have nothing to lose by waiting.
More importantly, the NMPA Spotify Settlement does not appear to be fair to independent music publishers and their songwriters. It is our understanding that this settlement like all of the previous NMPA settlements will be distributed, at least partially, by market share which means that the top four or five companies receive a majority of the settlement income because they dominate on a market share basis. This is particularly bad for publishing companies like ours that may not contain the most popular tracks yet represent lots of prominent songs that have a large value, but our overall market share is not big or dominant because we are boutique companies.
For the NMPA Spotify Settlement, they reported in the press that $5 million was guaranteed to be distributed by market share and some “unknown” amount of the $25 million would also be distributed by market share. That unknown factor should be troubling to all independents. It is hard to sign into a settlement and give up your potential claims when you don’t know what you are getting in return.
“the real problem is… the practice of launching a digital music service first, and then sorting out the licensing issues”
But the real problem is that the practice of launching a digital music service first, and then sorting out the licensing issues after the service is up and running has got to stop. Up to now, none of the major digital music companies (Spotify, Pandora, Rhapsody, Deezer etc.) have cleared all of the music before launching. If services obtain any licenses in advance, it’s typically only from the majors and a handful of the large independents. Independent music publishers and songwriters need to take a stand here and say that independent music publishing catalogs matter just as much as the large publishing catalogs. Our music has real value to these services and they need to license it BEFORE they launch. It is our belief that the class action is the only way to get these services (and third party licensing companies) to take independent publishers and songwriters seriously.
There is no guarantee that the class action will be certified. We are not experts on these matters, but we would like to point out that two well-respected law firms took these cases on a contingency basis, Michelman & Robinson in San Francisco and Gradstein & Marzano in Los Angeles. Law firms that take cases like this on contingency strongly believe the class will be certified. After all, they don’t get paid unless publishers and songwriters win. Since this case was filed in California, music publishers and songwriters do not join the class. They are automatically in the class unless they opt out, sign on to the NMPA Spotify Settlement (which prohibits participation in the Spotify Class Action) or if the case eventually is not certified. We ask independent publishers and songwriters to take a stand and not allow themselves to be treated this way any longer. Independents will have a much bigger win both financially and philosophically if they do not opt in to the NMPA Spotify Settlement. You can take a stand here for independent music and licensing in the digital age…be part of the solution.
Monica Corton is the Senior Executive Vice President of Creative Affairs and Licensing at Next Decade Entertainment, an independent music publishing company representing the band Boston, Harry Belafonte, the Estate of Jay Gorney, the Estate of Vic Mizzy, Jan Johnston, Bob McGrath, Millie Jackson, Marcy Heisler and Zina Goldrich among many others. She is responsible for signing new writers, negotiating all forms of licensing and the distribution of royalties.
David Lowery is singer songwriter for the bands Cracker and Camper Van Beethoven.