The National Music Publishers Association (NMPA) has sent a cease-and-desist letter to Spotify for allegedly hosting lyrics, music videos and podcast content containing the copyrighted musical works of its members without proper permissions. The organization, which represents music publishers in the US, says it “demands” these allegedly unlicensed works “be removed from the platform or Spotify will face copyright liability for the continued use of these works”.
The letter arrives a week later Advertising sign released an estimate claiming that Spotify will pay about $150 million less in US engineering royalties to music publishers and songwriters next year than publishers and songwriters previously expected. That's because Spotify added audiobooks to its premium, family and twin plans, and the company claims the move now qualifies them as a bundle, which pays a reduced percentage of royalties than regular standalone subscriptions, since Spotify now has to pay for books and music from the same subscription price.
The cease and desist letter, received from Advertising sign, covers a separate topic from last week's announcement, but the timing suggests the NMPA hopes to push back against Spotify's practices on several fronts. The letter continues: “Spotify appears to be engaging in direct infringement by hosting unlicensed musical works in its lyrics, videos, and podcasts, and by distributing unauthorized plays, syncs, appearances, and derivative works of those musical works to its users. To make matters worse, Spotify profits from such breaches.”
Written by NMPA executive vice president and general counsel Danielle Aguirre, the letter did not mention specific unlicensed works or how many instances of unlicensed works exist on Spotify, and warned of both unlicensed and “soon to be unlicensed” works by its members. When asked for a list or ballpark number of unlicensed projects, the NMPA declined to comment. However, if the NMPA ever goes so far as to file a lawsuit against Spotify for these alleged wrongdoings, the agency will provide more details.
Many music publishers currently have licenses with Spotify for their lyrics and video content. Unlike the government-regulated process for setting engineering royalty rates in the US, lyric and video licenses are direct deals between the publisher and the streaming service, and each negotiation is unique, but especially for lyrics, some publishers will license through third parties such as Lyric Find . These deals aren't considered significant moneymakers for publishers or streamers, and while their duration can vary, licenses typically last 1-2 years, according to a source close to the matter.
NMPA also mentions a recent Wall Street Journal article that claimed Spotify is working on tools that would allow subscribers to “speed up, mix and edit different songs from their favorite artists” in its letter to Spotify, warning the streaming platform that if it releases “any such feature” from Spotify “without proper permissions from our members” “may constitute additional direct infringement”.
Spotify and the NMPA have a history of not getting along, but as of late 2022, it appeared the two were on relatively good terms. After a contentious five years over how to set the US engineering royalty rate for streaming for 2018-2022, the NMPA, the Nashville Songwriters Association International (NSAI) and streaming services such as Spotify have come together to settle collectively the next rate period together (2023-2027), hoping to avoid another long and costly fight. The result was something David the IsraelitePresident and CEO of the NMPA, it was touted at the time as the “highest streaming rates in digital streaming history” due to the headline rate increase.
Part of the compromise for that settlement, however, included an update to how packets were handled, which was seen as a potential boon for streaming services. As the Association of Independent Music Publishers (AIMP) put it in its statement against Spotify's bundling practices, music publishers believe Spotify used a “loophole” to “bypass the [Copyright Royalty Board] resolution.” Israelite went further, calling the bundle reclassification a “potentially illegal move” when it was first announced, even though Spotify believes it rightfully qualifies. Recently, the NMPA admitted that a suit against Spotify for bundling was ” possible”.
Read the full letter below:
Dear Mr. Kaefer [vp and global head, music and audiobook business] and Mrs. Constant [general counsel of Spotify]:
I am writing on behalf of the National Music Publishers' Association (“NMPA”) regarding copyright infringement of our members' musical works on the Spotify platform. As the voice of our members, the NMPA protects, promotes and advances the interests of music creators and promotes the rights of publishers and their songwriter partners, who own and/or control the copyrights of musical works.
Music is required for the Spotify service. it's why subscribers use the Spotify platform every day. Spotify's primary use of musical works through interactive streams and downloads is subject to the obsolete compulsory license under 17 USC § 115 and public performance licenses governed by consent decrees.
Regardless of the mechanical and public performance licenses Spotify may have, however, the use of lyrics and music in videos and podcasts on its platform requires rights that must be negotiated directly with rights holders in an open market.
It has come to our attention that Spotify displays lyrics and reproduces and distributes music videos and podcasts using musical works without the consent or compensation of the respective publishers and/or administrators (our members) who control the copyright in the musical compositions. Therefore, these uses of musical works on the Spotify platform are unlicensed or will soon become unlicensed.
US copyright law generally grants copyright owners the exclusive right to, among other things, reproduce, distribute, display, publicly perform, and create derivative works from their copyrighted works under 17 USC § 106. Violation of these exclusive rights constitutes copyright infringement pursuant to 17 USC § 501.
Spotify therefore appears to have engaged in direct infringement by hosting unlicensed musical works in its lyrics, videos and podcasts and by distributing unauthorized reproductions, syncs, appearances and derivative uses of those musical works to its users. To make matters worse, Spotify profits from such breaches.
Therefore, on behalf of our members, the NMPA demands that unlicensed lyrics, music videos and podcasts be removed from the platform or Spotify will be held liable for copyright for the continued use of these works.
We also understand that Spotify wants to offer a “remix” feature that allows Spotify subscribers to “speed up, combine and re-edit” their favorite songs to create derivative works. Spotify warns that the release of any such functionality without the appropriate licenses by our members may constitute additional direct infringement.
The NMPA further requires Spotify to preserve all electronically stored information (“ESI”), as defined by Rule 34 of the Federal Rules of Civil Procedure, along with any paper records in Spotify's possession, custody, or control that related to the use of members' works without permission. Spotify must also stop any auto-deletion features that affect ESI in this regard.
This letter is not intended to be a complete recitation of the facts or claims that may be asserted against Spotify by the NMPA, its members and/or other copyright holders and is without prejudice to all rights or remedies against Spotify and all of others acting in concert with Spotify, including, without limitation, monetary damages and attorneys' fees as provided in 17 USC §§ 502-505.
Sincerely,
Danielle Aguirre
from our partners at https://www.billboard.com/business/streaming/nmpa-spotify-cease-desist-letter-unlicensed-lyrics-video-1235682873/