Streaming services have become the latest step in the evolution of how we consume content. People are no longer encumbered by physical copies of the movies they want to watch or the music that they wish to listen to. That is especially true for music: not only do you not need to carry around your CDs or your iPod, you don't have to own the work in order to listen to it, thanks to services like Spotify. All Spotify asks of its listeners is to listen to ads every few songs, or pay a nominal fee for the ad-free version of the app. But a recent lawsuit may shake up the way that millions of people get their music.
As reported in Billboard, Spotify has been hit with a class-action lawsuit, contending that the service is violating artists' copyrights. The suit was filed by David Lowery, the frontman of musical acts Cracker and Camper van Beethoven. Lowery argues that Spotify has been streaming his work and the works of others without permission and failing to pay proper royalties for those works. The suit also alleges that Spotify has made public admissions of its inability to obtain licenses. Lowery is seeking $150 million in damages.
For its part, Spotify states that it is committed to paying royalties to artists, but that it can be difficult to determine the correct rights holders for some works. They also state that they are working with the National Music Publishers Association to find the best way to pay royalties, and are at work on a publishing administration system to correct the problem. However, Lowery's suit argues that the fact that Spotify has a reserve of between $17 and $25 million dollars to pay royalties on songs without a accompanying rights holder is an admission that they are to some degree knowingly infringing upon these copyrights. Spotify is also in negotiations with the National Music Publishers Association on a settlement over a suit claiming that Spotify failed to accurately keep track of royalty payments.
Lowery's suit brings to the foreground the long-standing issues of artists' rights when it comes to streaming services. The suit could open the door for legal action against Pandora, Apple Music, and other services that operate on similar models to Spotify. The adjudication of this case might determine if other services look to quickly strike deals with artists and publishers to avoid court cases themselves.