Spotify agrees to pay NMPA $21 million for unmatched mechanical royalties

The issue of unmatched mechanical royalties is a pressing one for Spotify as the company faces multiple multi-million dollar lawsuits on the matter. 

This likely prompted the newly-announced deal with the National Music Publishing Association that will see the streaming service create a $21 million compensation pool for those unmatched copyrights. 

Of these, $16m are being set aside for royalty payments and another $5m are reserved for publishers and songwriters as a bonus to enter the deal.

Two important aspects of the deal include providing publishers and songwriters with the ability to easily identify and properly claim “unmatched” works online, and a continued collaboration between Spotify and the NMPA to ensure the streaming service can continue to improve the accuracy of the way it matches works. 

NMPA President and CEO David Israelite stated: “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 NMPA stated that any royalties associated with works that remain unmatched after each claiming period will be distributed to publishers and songwriters who participate in the settlement. However, the present deal will not affect royalties owned to those who choose not to participate in the deal. 

The deal only includes US works, it will be interesting to se how Spotify will move internationally to figure out this intricate but important area of royalties allocation.

 

(Andrea Leonelli)