In it's latest spat with music publishers, Spotify says they owe the streamer for overpayments. Last year's US Copyright Royalty Board rate change included a retroactive cut in the minimum payment that the streamer makes on student and family plans along with a graduated 44% increase in payments to songwriters and publishers over the next five years.
Spotify has appealed the overall rate increase, but now also wants to take advantage of the cut. "What's interesting about this [Spotify] move is they are appealing the decision, but now want to take advantage of that part of it," states National Music Publishers Assn. CEO David Israelite.
"According to the new CRB regulations, we overpaid most publishers in 2018," Spotify said in a statement. "While the appeal of the CRB decision is pending, the rates set by the CRB are current law, and we will abide by them - not only for 2018, but also for future years in which the amount paid to publishers is set to increase significantly."
The new rates count a family as 1.5 subscribers and students as half a subscriber. So a student plan that previously triggered 50 cents in payments from Spotify now only adds 25 cents. Family plan payouts also dropped from 75 cents to 50 cents, with a new cap off 75 cents for the entire family.
Calculate back 17 months to January 1, 2018; and you can see that it adds up to a significant sum of money for either side.
Trying to play nice, Spotify promised this: "Rather than collect the 2018 overpayment immediately, we have offered to extend the recoupment period through the end of 2019 in order to minimize the impact of the adjustment on publishing companies."
Further complicating the situation, many publishers have already paid the money that Spotify wants back to their songwriters; and some of those songwriters could now even be signed to other publishers.