Back in 2014, Taylor Swift made waves by pulling her entire music catalog from Spotify. The move kicked off a wave of media scrutiny for the music streaming giant, which may be a part of the reason the National Music Publisher’s Association sued it for failing to properly compensate artists for streaming their music. After some negotiation, Spotify has reached an agreement with the to pay $21 million in unpaid royalties to publishers and songwriters.
Spotify will reportedly pay $16 million in royalties and an additional $5 million “bonus fund” for publishers and songwriters, an unknown source told The Verge. This agreement will provide the ability to identify and claim “unmatched” works online, as well as provide an opportunity for direct licensing between the publisher and Spotify. Spotify hopes that this agreement can soothe tension between the company and music publishers. This settlement follows a $150 million lawsuit filed against the Swedish-based company for distributing music content without a license.
“I am thrilled that through this agreement both independent and major songwriters will be able to get what is owed to them,” said David Israelite, president and CEO of the NMPA, in a statement. “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. I look forward to all NMPA members being paid what they are owed, and I am excited about the creation of a better process moving forward.”
This isn’t the first time the NMPA has fought over licensing rights. About 5 years ago, YouTube agreed to pay a $4 million advance for music publishing royalties on video content containing songs. In 2014, it was reported that for every 10,000 streams, Spotify Premium artists who had recording and publishing rights to their music made an average of $90, according to Digital Music News.