Spotify Songwriters and Publishers Administration System
Spotify was founded for two reasons: to bring all the music in the world to all the world’s music fans in a fun, easy and affordable way – and to create real value for the music industry again, including labels, publishers and the terrific songwriters and artists who create and perform the music we love. We’ve paid well more than $3 billion in royalties to date, including $300 million in the first quarter of this year alone.
One of our core commitments is making sure that everyone involved in the creation of music is paid fairly, rapidly, and transparently. Unfortunately, when it comes to publishing and songwriting royalties, especially in the United States, that’s easier said than done because the data necessary to confirm the appropriate rightsholder is often missing, wrong, or incomplete.
Today we are excited to announce that Spotify will invest in the resources and technical expertise to build a comprehensive publishing administration system to solve this problem.
So what exactly is the problem? Music industry licensing and copyright structures are legendary in their complexity – and they change from country to country and agreement to agreement. One of the most difficult challenges is the lack of accurate data as to who owns the rights to a specific track, especially when it comes to songwriter and publisher rights. In many cases, the ownership of the rights are not even finalized when a record is released; in many other cases, rights are held by multiple parties, rights change hands, and rightsholders remain entirely unclear.
When one of our listeners in the US streams a track for which the rightsholder is not immediately clear, we set aside the royalties we owe until we are able to confirm the identity of the rightsholder. When we confirm the rightsholder, we pay those royalties as soon as possible. To put this all in context, the royalties we have set aside amount to a fraction of one percent of all the royalties we have paid – but that doesn’t change the fact that those royalties are important revenue to songwriters and publishers and we want to make sure they end up in the right hands.
This is a global problem – outside the U.S., publishing rights organizations and collecting societies who receive royalties on behalf of songwriters and publishers face similar challenges. And it is a complex problem – we are committed to solving it, but it is going to take significant time and effort. In the meantime, we have been working closely with our partners and friends in the industry, especially the National Music Publishers Association (NMPA), to find the best way to correctly pay the royalties we have set aside to the right publishers and songwriters. But we want to do better than that – we want to fix the global problem of bad publishing data once and for all, and that’s why we’re making this commitment today.