Music streaming service Spotify has struck “landmark industry agreement” with the National Music Publishers’ Association (NMPA) for royalty payments. The deal establishes a large bonus compensation fund that is a substantial percentage of what is currently being held by Spotify for unmatched royalties, and creates a better path forward for finding the owners of publishing rights who should receive streaming royalties.
Founded in 1917, the NMPA is the trade association representing all American music publishers and their songwriting partners. The NMPA’s mandate is to protect and advance the interests of music publishers and songwriters in matters relating to the domestic and global protection of music copyrights.
In the past, the 2500-strong group has pursued litigation against numerous organizations, including forcing Napster to migrate to a fee-based service. It had less success in a suit against YouTube filed in 2007, which was dropped in 2011. In 2010, the NMPA represented EMI, Sony/ATV, Universal and Warner/Chappell, Bug, MPL Communications, Peermusic and the Richmond Organization in a lawsuit against LimeWire. The LimeWire suit sought $150,000 for each song that was distributed, but settled for a $105 million payout from the company, and a $14 million fee for LimeWire creator Mark Gorton.
The National Music Publishers’ Association President and CEO David Israelite praised the agreement, saying that “NMPA’s goal has always been to ensure publishers and songwriters receive the money they deserve. I am thrilled that through this agreement both independent and major publishers and songwriters will be able to get what is owed to them. 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.”
The Spotify deal will allow copyright owners to identify their works and receive the money Spotify has set aside for the past usage of unmatched works. It is intended to fill in the gaps in ownership information, which should help to ensure that royalties are promptly paid to their rightful owners in the future. Any royalties associated with works that remain unmatched after each claiming period will be distributed to publishers and songwriters who participate in the settlement, but the agreement will not affect the royalties owed to any publisher or writer who does not choose to participate.
