Spotify is demanding that a federal judge throw out a lawsuit filed by the Mechanical Licensing Collective over royalty rates, calling the case “silly” and “wasteful.”
MLC sued earlier this year, alleging that Spotify had “unilaterally and unlawfully” chosen to almost halve music rights payments through betting — specifically, claiming that adding audiobooks to the service entitles the company to pay a lower “package” rate.
But in a motion to dismiss filed in court on Wednesday, Spotify calls those claims “frivolous and wasteful” — arguing that making hundreds of thousands of audiobooks available to subscribers was not a “symbolic” gesture aimed at reducing music royalties.
“MLC's position is nonsensical and not really supported,” Spotify's lawyers write. “And it deeply undervalues the contributions of the tens of thousands of book authors whose works are available with a Spotify Premium subscription—from literary luminaries, to mainstays on best-seller lists, to up-and-coming authors who are finding their audience.”
MLC, which collects streaming royalties for songwriters and publishers, filed its lawsuit in late May — a week after Bulletin board estimated that Spotify's move would result in the company paying about $150 million less next year. In its complaint, MLC alleged that Spotify was “misrepresenting” the nature of its streaming services to secure the lower rate.
“The financial consequences of Spotify's failure to meet its legal obligations are enormous for songwriters and music publishers,” the group's lawyers wrote at the time. “If left unchecked, the impact on songwriters and music publishers of Spotify's illegal underwriting could run into the hundreds of millions of dollars.”
At issue in the lawsuit is Spotify's recent addition of audiobooks to its premium subscription service. The streamer believes that because of the new offer, it is now entitled to pay a reduced “package” royalty rate under the federal legal settlement that governs how much streamers pay rights holders.
In Tuesday's motion, Spotify's lawyers vigorously defend that interpretation. They argue that the audiobook market has attracted “billions in consumer dollars” and that the addition of books was the kind of valuable new perk that was meant to be covered by the lower group rate.
“At the heart of this dispute is an easily answered question: Is book audio streaming different from music streaming, offering more value than tokenism?” the company's lawyers write. “The answer is unequivocally yes, and there is no need to affirmative action in federal court.”
The rule at issue says streamers can use group pricing if they offer “one or more other products or services of more than nominal value.” Spotify's lawyers write that the claim that more than 200,000 audiobooks do not qualify for this rule is “convoluted.”
“The creative output of these writers is not merely of 'symbolic value,'” Tuesday's filing said. “Acceptance of this uncontroversial, common-sense proposal should end this useless and wasteful litigation.”
MLC lawyers will file a formal response to the motion in court in the coming months.
from our partners at https://www.billboard.com/pro/spotify-blasts-mlc-audiobook-royalties-lawsuit/
