Does Spotify’s New Lyrics Feature Violate U.S. Copyright Law?

[UPDATE 2] The centerpiece of today's Spotify web upgrade is a Lyrics button that delivers lyrics from MusixMatch scrolling across the screen karaoke style. (see video below) But the new feature may place Spotify in violation of U.S. copyright law, according to Joseph C Vangieri, CEO of karaoke provider DigiTrax.

Here's what Spotify's new lyrics feature looks like in action:

U.S. copyright considers karaoke a special use and allows songwriters to opt out of having their songs used in that manner. Abba, Coldplay and The Eagles are among the many major artists who have not licensed karaoke use of their songs in the U.S., according to the list published here.

Karaoke provider DigiTrax has licensed more than 17,000 tracks in the U.S.; and in an an open letter sent to industry trades, the company's CEO questions whether or not Spotify and MusixMatch have done the same for all of the artists in Spotify's vast catalog.

The letter:

Subject:

How is this legal? Spotify Adds Lyrics to Its Desktop App

Open Letter to the publishing industry,

So the Lyrics are synchronized with the music http://bit.ly/1MUaucH

So how is Spotify getting around getting video sync license for this feature?

There are a great many song writers who will not allow "karaoke" of their songs. See list here: http://www.karaokecloud.info/

This is unfair competition for us American "Karaoke" companies. Can you weigh in on this? It is a big part of the Copyright law. Meaning does the law apply to everyone?

Karaoke should be a multi-billion dollar industry in America, but because the lyric synchronized to the music is a video sync, each song must be cleared.

How is Spotify getting away with this?

Joseph C Vangieri CEO, DigiTraxThe Key QuestionSpotify has been delivering lyrics under an agreement with Musixmatch for some time, but with today's update the manner in which they are displayed has changed. The key question is whether or not songwriters and publishers feel that lyrics “moving” rather than a karaoke ball bouncing constitutes a synch; and therefore requires an additional license.We've reached out to several of the involved parties for comment, as well as, to several industry experts for their opinion.