back to article You Wreck Me, Spotify: Tom Petty, Neil Young publisher launches $1.6bn copyright sueball

Spotify has been accused of rockin' a little too freely by a Californian music company that claims the streaming biz failed to gain proper licences for its artists' songs. Wixen Music Publishing – which represents Tom Petty, Neil Young, The Black Keys, The Doors, and more – launched the sueball at Spotify at the end of last …

  1. adam payne Silver badge

    "As a direct and proximate result of Spotify's willful and infringing conduct, Wixen is entitled to actual damages, including the substantial profits of Spotify."

    Have they even made a profit yet?

    1. Anonymous Coward
      Anonymous Coward

      Depends. "Profit" is intentionally a non-goal for most young tech firms. Profits mean taxes, so getting there isn't necessarily the ideal. Most of them aim for positive cash flow. More money coming in than going out. Sounds like profit, right? Well, not to accountants, who are removing certain other "costs" from the numbers to get back into the red.

      Specifically tech companies (particularly around IPO) have to recognise a staggeringly large pseudo-cost as all their stock-based compensation suddenly appears on the balance sheet. This nice big hefty red number keeps the company unprofitable for a good few years after the fact, even if their bank balance is technically growing.

      1. K
        Pint

        "a non-goal for most young tech firms."

        Not sure I would call Spotify "Young" or a "Startup" (as its been referred to elsewhere)..

      2. CrazyOldCatMan Silver badge

        This nice big hefty red number keeps the company unprofitable for a good few years after the fact, even if their bank balance is technically growing

        So - much like Hollywood accounting then? As used by the film and music industry..

        A pox on all their houses.

  2. The Man Who Fell To Earth Silver badge
    FAIL

    Great

    Yet another company who, like Uber's great co-called "innovation", has a business plan that has at it's core simply the increased efficiency that comes with ignoring the Law. Like the Mafia's business plans.

    1. tiggity Silver badge

      Re: Great

      @ The Man Who Fell To Earth

      Have you any idea how complex the issue if music rights licencing is (especially with contortions of historical changes in how music is "reproduced" - the joys of mechanical reproduction rights et al and arguments about which rights apply to digital streaming kept lawyers happily renumerated for ages - someone more expert than me will know if there is yet a definitive answer or whether its still get all the rights just to cover yourself best advice)

      Because it is complex, there are specialist companies that deal with it - Harry Fox is one.

      A bit cheeky to claim Spotify fully at fault when they outsource this (difficult) task to a supposed specialist in that area

      full disclosure - had massive pain dealing with image copyright / ownership / rights issues back in the day, discovered (from poor folk I "met" (much online) at the time who also had to deal with music) that my pain was a walk in the park compared to music - so indirect knowledge (but from credible sources) of the minefield of music rights

      1. israel_hands

        Re: Great

        If licensing is such a nightmare then surely they should have made sure it was all set in place before they start selling music they don't own the rights to?

        Instead they ploughed ahead, assuming they'd be able to get away with it long enough that when people noticed what they were up to they'd just blame it on a 3rd-party and pay less to settle than they would have had to if they'd done it correctly in the first place.

        Fucking chancers.

        1. SolidSquid

          Re: Great

          While there are problems with Spotify, the claim they knew Harry Fox didn't have the infrastructure to manage mechanical licences when they explicitly advertise themselves as being a specialist in that area is a bit questionable. It might well be that they knew this was the case, and they were trying to pull a fast one, but at the surface level it does at least seem plausable that they expected Harry Fox to be able to manage the licencing for them to ensure it was done properly, and it's Harry Fox who screwed up

        2. tekHedd

          Re: Great

          I have to assume that the majority of the downvoters have never produced a piece of IP worth stealing. :) "Music wants to be free." So does the cash in your bank account, friend.

      2. Anonymous Coward
        Anonymous Coward

        Re: Music Licensing

        Is a morass.

        If I create a Digital AV show and use some of MY music on the soundtrack, I have to get a licence from the PRS (or whatever they are called this week). By MY music, I mean something that I have created and performed myself.

        If I sing/play the song/songs on stage then no license is needed.

        Yet I need a license to put it in a show that I'm giving. No copyrights are broken as I'm the composer and performer yet I need to pay some QUANGO/Protection Scam Company to be able to use my own stuff in my own work.

        Madness, sheer Madness.

        Don't get me wrong, I think that the likes of Spotify are ripping off artists and publishers and deserve everything that they are forced to pay but someone somewhere needs to stop the protection racket that is operating supposedly on behalf of the artitsts.

        1. Adam 52 Silver badge

          Re: Music Licensing

          "If I create a Digital AV show and use some of MY music on the soundtrack, I have to get a licence from the PRS"

          Says who?

          1. Charlie Clark Silver badge

            Re: Music Licensing

            Says who?Says the law. You must apply for an exemption from the licence companies. Even for your own stuff. There is logic to some of the conditions but it's also true that the licence-holders act as if they've invented a golden goose.

            1. Ian 55

              Re: Music Licensing

              Point me at that law?

            2. Adam 52 Silver badge

              Re: Music Licensing

              I'd be interested in a link to the legislation because I can't, off the top of my head, think of any way it could be enforced.

              1. CrazyOldCatMan Silver badge

                Re: Music Licensing

                I can't, off the top of my head, think of any way it could be enforced

                Here's how:

                Music license quango hears a bit of music in a show or on the radio.

                Music quango sends the producer a bill.

                Producers says "I wrote that bit of music".

                Quango says "prove it".

                Music producer has to go to lots of effort to prove that they originated a bit of music.

                In short, the licensing bodies have a policy of "demand first, check later". Amusingly, there is a YooToobe video of 60 minutes of white noise that's already got 5 DMCA claims against it..

                And by "Licensing Body" I mean the legions of ticks that infest the music business and try to leech every bit of money they can off the people actually making music[1] while adding nothing themselves except confusion and misery.

                [1] Who I have a great deal of sympathy with[2]. Especially the people *actually* doing the work to create original music rather than the marketing-friendly faces that the big labels slap in front of tunes churned out like regurgitated pap.

                [2] Especially people like Marillion who, having been shafted by the music business repeatedly, got into crowd-sourcing the cost of making new music by pre-selling to fans and only use the established labels to distribute the music. Which they could do because they were an established band with a large and loyal following (of which I'm one).

  3. Anonymous Coward
    Anonymous Coward

    Depending on the outcome spotify's stock could be free falling.

    Disclaimer: The other side of my face is now red from yet another slap.

    1. Marvin O'Gravel Balloon Face

      Keep on knockin' off the Free World

    2. Nifty Bronze badge

      "Depending on the outcome spotify's stock could be free falling"

      You *are* referring to the Tom Petty song there?

      1. Anonymous Coward
        Anonymous Coward

        You *are* referring to the Tom Petty song there?

        Yes and I won't back down.

        Disclaimer: I'm running out of places to slap.

  4. simonb_london

    Technically, it doesn't cost much to make good quality music these days. What used to only be possible on a fully kitted-out studio is now possible on a laptop, Ipad or even a phone with a good mic and/or midi-keyboard plugged in.

    The era of recording music as a business model by packaging it in some physical medium and tying it down with "copyright" is also over.

    This isn't the end of good music, its just that the old rules of making it have become impractical and irrelevant.

    1. Valerion

      Just because it has become easier to record something in good quality, does not mean that the music itself is actually good.

      I'd rather listen to Petty/Young recorded on a 1970s portable mono tape recorder in terrible quality than much of today's garbage written and recorded on an iPad by someone who classifies their music as "grime".

      1. phr0g

        "I'd rather listen to Petty/Young recorded on a 1970s portable mono tape recorder in terrible quality than much of today's garbage written and recorded on an iPad by someone who classifies their music as "grime"."

        And there is the beauty of subjectivity. I love the classics (and much classical), I also enjoy much modern music.

        I regularly listen to The Stones, Beatles, Petty, Young (although his nonsense promoting the dubious merits of HD music have irritated me beyond belief), I also love many modern bands, artists and even electronic music written and composed on laptops (or possibly even tablets).

        What makes music good or bad? Some of the worst music in my ears is self-gratification style jazz blowouts, or hyper-difficult and hyper-unlistenable guitar solos. A huge amount of talent and not (in my ears) a huge amount of fun (Much like the recent world-record of a high A hit by Audrey Luna).

        You want modern music with the soul of your examples? Try Ray LaMontagne, Gregory Alan Isakov, Elbow, First Aid Kit, London Grammar, to name a few off the top of my head. Take a listen to Radio Paradise.

        But don't disregard modern pop, rock or anything, because YOU don't like it. Many do.

      2. John Brown (no body) Silver badge

        "much of today's garbage written and recorded on an iPad by someone who classifies their music as "grime"."

        I'm not so sure there's less good music out there, rather it's buried under a morass of shite music because it's so easy to get music "published" somewhere online these days.

    2. Hollerithevo

      'Good quality music'

      This could mean either music produced to high standards, or good music.

      There are many examples out there of second-rate songs fitted out with impressive complex beats, backing, this, that and the other. Much Ibiza dance music is complexly mature, but it will last the life of a mayfly.

      Good music can be played on a kazoo and last centuries.

    3. elip

      "The era of recording music as a business model by packaging it in some physical medium and tying it down with "copyright" is also over."

      As someone who makes side cash doing exactly this, I can reassure you, this statement is incorrect. I also cut vinyl records for folks in the local music scene here in NC... if anything, tape, CD, and vinyl are growing in popularity (again).

      1. KH

        @elip: "As someone who makes side cash doing exactly this, I can reassure you, this statement is incorrect. I also cut vinyl records for folks in the local music scene here in NC... if anything, tape, CD, and vinyl are growing in popularity (again)."

        But isn't that because their popularity dropped to essentially zero for a while there? Yes there seems to be a small resurgence (I see vinyl at Barnes and Noble at the mall as I walk by their window), but what sort of percentage does it have compared to digital? The vinyl "comeback" really just feels like already-established artists pumping out alternative types of media alongside usual digital releases, in order to reach hipsters that use retro equipment in an attempt to be cool.

        Not trying to be argumentative, just curious about the actual size of this resurgence.

      2. John Brown (no body) Silver badge
        Coat

        "if anything, tape, CD, and vinyl are growing in popularity (again)."

        Does that growth correlate with the number of bearded people wearing lumberjack shirts?

    4. strum

      >Technically, it doesn't cost much to make good quality music these days.

      This story has nothing to do with the recording of music - but with the writing of it. This is no easier today than it was fifty years ago.

  5. Craigie

    WTF

    Are 'mechanical licenses'?

    1. Gary Heard

      Re: WTF

      As stated above, it's messier that a pig in sh1t. My wife composes and we've found out the hard way that getting something published makes the publisher rich, not the composer

      Mechanical Royalties

      Royalties paid to songwriters and artists when music is sold (think CD or vinyl) but also when music is streamed (streaming mechanicals) “on-demand” (like Spotify). Songwriting mechanical royalties are set by government through what’s called a compulsory license, which right now is set to about 9 cents of every dollar earned via sale.

      Current copyright regulation wasn’t created at a time when services like Spotify or Beats existed, (which are kind of a hybrid of ‘performance’ and a ‘sale’) so they pay both performance royalties and mechanical royalties to songwriters and artists.

      Spotify pays about 10% of its revenue to songwriters (split between mechanical and performance royalties) and about 60% to the artists. Services like Spotify don’t have to negotiate with songwriters, because the government sets the rates – through the consent decree for PROs and a compulsory license for mechanical licenses.

      Mechanical royalties for songwriting are usually paid by labels or artists to a third party, (traditionally for the major publisher it’s been HFA (the Harry Fox Agency), who pay the publishers.

      (Source: American Songwriter)

  6. Haku
    Coat

    $1.6bn? That's nothing, some people have $8bn iPods!

    https://www.youtube.com/watch?v=GZadCj8O1-0

    1. Anonymous Coward
      Anonymous Coward

      Re: $1.6bn? That's nothing, some people have $8bn iPods!

      And I own every recording ever too! I have it compressed on this post-it-note that reads "compute pi to infinite precision".

      1. Haku

        Re: $1.6bn? That's nothing, some people have $8bn iPods!

        That means you can sue anyone who makes any new invention in the future because that sequence of numbers already contains those inventions details.

        Genius!

        Now all you need to do is convince a judge to grant you a copyright on the entire world & universe based on that post-it-note.

  7. Chris G Silver badge

    Old music biz saying

    Where there's a bit, there's a writ.

    Often a case will be allowed to ' mature ' before it is actually brought to a court in order to add value.

    One thing is sure, no case is ever for a trivial amount, witness the hundreds of specialty lawyers who make a living from music and can't play a note.

    1. Muscleguy Silver badge

      Re: Old music biz saying

      Two 'characters' once sued each other for libel in a Scottish court seeking the princely sum each of £1. They represented themselves so only paid court costs. The court got them to see sense.

  8. Anonymous Coward
    Anonymous Coward

    For musicians it seems to be a trade off between how much you want fame & fortune ( => major record label ) and how much you want ownership/control of your own compositions & performances.

    Looking at the back of a CD I got a week ago I see this:

    "The phonographic copyright in these performances is operated by Discipline Global Music on behalf of the artists, with whom it resides... Discipline accepts no reason for artists to assign the copyright interests in their work to either record company or management by virtue of a 'common practice' which was always questionable, often improper, and is now indefensible."

  9. DontFeedTheTrolls Silver badge
    Boffin

    At a "mechanical" level it doesn't seem too difficult to me.

    I have a database table of licenses

    I have a database table of songs

    I have a relationship where song is linked to a license

    If there is no license linked to a song then a user cannot stream it.

    Now I get that there are complexities around getting the actual license but as said above, no linked license, no play. But then we know lots of tech companies want to bend and break the rules, so, see you in court...

    1. Anonymous Coward
      Anonymous Coward

      So, You get a licence...

      To find out it was contested, between companies, writers, performers, producers, singers, musicians, countries, companies (did I already say that?) etc.

      While I agree, Spotify and a few other Streaming services were/have been know for the "stream first, ask permission after" business model. Which is not the right way or fair way to do it. This case though may not be simple!

    2. Charlie Clark Silver badge

      It isn't that simple: just try licensing the stuff and you'll soon find out.

    3. CrazyOldCatMan Silver badge

      I have a database table of songs

      I have a relationship where song is linked to a license

      Which is fine for an initial position. Now, who updates the table when licensing details change? This happenes all the time and, if the details are not up to date then payments go to the wrong person and you get sued by the new license-holder. And don't forget, that process has a cost (verification and validation for one) that someone has to pay.

      It's not quite as simple as you suggest.

  10. Duncan Macdonald Silver badge

    Spotify seems one of the good guys!!

    If it pays 60% of its revenues to the artists and 10% to songwriters then it is returning far more of the money to the people that make music than most RIAA members ever do.

    1. Anonymous Coward
      Anonymous Coward

      I'm not so sure about that

      Their revenue last year was $3 billion, so that would mean they paid out about $2 billion. That's with 140 million active users, 50 million of whom are paying. I have no idea how much the average customer listens to, but even an hour a day would mean something like five or six thousand songs a year. So the per song rate is pretty tiny.

      I read a while back that the main objection the industry has with streamers who offer ad-supported "free" listening is they pay a much lower rate for songs played for those subscribers, because it uses the same licensing scheme as broadcast radio. The problem is that the low rates for radio broadcasts came about because the industry felt airplay translated into sales. That's no longer true with streaming, especially streaming where people have some choice over what is played, because people no longer need to own music. The industry wants the same rate for both paid and free subscribers, but the streamers who offer free listening are very resistant to it because they know it will increase their costs and reduce their revenue.

      1. Charlie Clark Silver badge

        Re: I'm not so sure about that

        Broadcast licensing is a complete mess because the publishers wanted to have their cake and eat it: promote shit by getting it played a lot. As a result, for years now most radio stations play more or less what the publishers tell them to. Hardly surprising that some listeners got fed up and started looking for alternatives.

        Personally, I don't like the streaming model but I think you're numbers are inflated. There will be some people listening to that much but I suspect the majority will be close to 10 - 20 hours a month. This is the same calculation for all streaming services: get people hooked by the promise of unlimited and then just enjoy the cashflow as people fail to cancel their subscriptions.

        1. Anonymous Coward
          Anonymous Coward

          Re: I'm not so sure about that

          The majority probably are 10-20 hours a month but the average will still be an hour a day because there is a sizeable minority who listen to music pretty much every waking hour.

          1. Muscleguy Silver badge

            Re: I'm not so sure about that

            I do, except when I'm walking/running about. I never got into the habit of it and find earphones uncomfortable. But then I have amassed a huge iTunes. The Top Rated list of it now has (checks) 2.6 days of music on it and I own the lot. Downloads and CD rips.

            Mind you it started as a family common thing way back around the beginning of the Century when we bought a Type II iMac. It is still named after the youngest, several computers later.

            Our existing CDs kids', ours got ripped and downloaded. The whole thing is 64GB and has 7,881 items in it.

            1. CrazyOldCatMan Silver badge

              Re: I'm not so sure about that

              The whole thing is 64GB and has 7,881 items in it

              That's not that big - my iTunes library (likewise bought and/or ripped) is about 120GB and that's after trimming out the old prog that I no longer listen to..

              From memory it's about 12K tracks. Being a mixture of prog/jazz/classical/rock/folk I suspect that the average track length is somewhere about 5 minutes.

          2. Charlie Clark Silver badge

            Re: I'm not so sure about that

            but the average will still be an hour a day

            Statistics 101: define average. In this case the modal average is of greater interest for the operators. But given 10 million subscribers you need a lot of heavy users to signficantly shift the mean and in such cases the usual "nudges" can be applied.

  11. The Nazz Silver badge

    On the other hand

    Also, it would help if they recognised Spotify as a succesful advert for their product, the music/songs.

    I've trialled much music from there and gone on to purchase a significant amount of physical product thereafter, some new, some supplementing my existing collection (much of which is already Petty, Young and the Doors) of vinyl and CD's.

    Some of which, certainly, would not have happened without Spotify.

    Also, think of it as Quality Control, some of even Neil Youngs stuff is so poor that it has put me off buying it.

    Funny old world, Captain Morgan isn't allowed to target u18s yet many music acts, incl Arian Grande ( and much worse) can freely aim at pre-teens.

    Ps Wixen, if and when you win the case, how about cutting me in on a share of the proceeds to recompense for me storing much of "your" Spotify music on my equipment?

    1. GruntyMcPugh Silver badge

      Re: On the other hand

      I'm the same, to me, Spotify is a set of banner ads with 'try before you buy' options,... if I find something I like, I go buy the CD. Now, I know I'm not the modern market, a story over at the BBC gave some stats that the average user streams 1,036 tracks per year,.... I'm nowhere near that. Also, I buy music on CD because I like to take music with me, and I go places where I'm off grid, so Spotify isn't the solution.

  12. Marketing Hack Silver badge
    Go

    Alternate article titles

    Tom Petty music publisher tells Spotify "Don't Do Me Like That"

    Niel Young music publisher stops searching for a "Heart of Gold" at Spotify, flings sue-ball.

  13. Anonymous Coward
    Anonymous Coward

    The customer, and only the customer, defines value

    And the value of music is next to nothing, regardless of the price the music industry demands. See here and here.

    So claims for exorbitant compensation are just (legalised) extortion by another name.

    The diva Dame Nellie Melba's recordings may have sold for the equivalent of £80 / record a hundred years ago, for which she got 25% in royalties, but those days are never coming back.

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