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Does Spotify have the Rights Stuff?

The Gen believes that we can all now move beyond the debate around streaming being the saviour of the recorded industry. The figures speak for themselves- Spotify now has 60m paying subscribers and is expected to generate $3bn for rights holders this year.

The IFPI’s latest research into music consumption on a global level reveals that 45% of fans are engaging with licensed audio streaming. This is an increase of 37% in comparison to 2016, with figures based on research conducted by Ipsos Connect across 13 major music markets.

Digging a little deeper adds a generational angle to this- Among consumers of paid subscription services, 90% listen using a smartphone, with 85% of those questioned aged 13-15 using streaming services.

We can all agree that this is good for the industry but some discomfort remains- across the pond, major songwriters including Neil Young and the estate of The Doors have voiced outrage at Spotify’s inability to identify and pay a tranche of mechanical rights in the US marketplace over the past six years. Spotify responded by offering to effectively buy off the affected composers through a $43m settlement offer, then going on to make a legal argument that it wasn’t even obliged to recognise US ‘reproduction’ rights. This triggered understandable outrage across the music community in the US.

And then we have Lyor Cohen recently claiming that YouTube is actually giving a fair deal to rights holders.

So, Spotify– Friend or Foe? We shouldn’t really need to be asking at this stage and one can’t help but feel they have missed the point. The tendency to try and throw money at complex problems involving licensing was also recently demonstrated by Facebook. It is worrying and perhaps betrays the relative immaturity of tech companies. You are dealing with artists and songwriters and it is about recognition for their work as much as anything. It is frankly your job to deal with these complexities.

To quote the late great music manager Jazz Summers: “get the music right, and the rest will follow”. A simple philosophy but one that rings true and extends to fair treatment of songwriters- one that Spotify, as it eyes up an IPO and grapples with its profitability problem, should take to heart if it wishes to play the long game.

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