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A Department of Justice lawsuit against Live Nation for violating U.S. antitrust laws is imminent and could be filed as soon as Thursday (May 23), a source with knowledge of the DOJ’s plans tells Billboard.
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The lawsuit is rumored to charge that Live Nation has a monopoly on event ticketing through Ticketmaster and that it illegally uses its monopoly power to grow its business and stifle competition. The DOJ has been investigating Live Nation for more than two years. With that investigation now wrapped, company president Joe Berchtold recently said he was that he was hopeful his company would avoid a legal showdown with the DOJ’s top antitrust lawyer, Jonathan Kanter.
“These are always serious discussions. We wouldn’t get to this point if they didn’t have concerns, but the good news is we’re still talking and they’ve said they have an open mind,” Berchtold told attendees at the J.P. Morgan Global Technology, Media and Communications conference in Boston on Tuesday (May 21).
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“Without getting into the real details of the conversation, I think it’s fair to say I continue to believe that we fundamentally have business practices that are fully defensible,” Berchtold added, before continuing: “We’re also open to figuring out common ground in order to get this settled and moved on. But we don’t know exactly what they want at this point still.”
Live Nation declined to comment for this story.
The Department of Justice’s case is believed to be centered around Ticketmaster’s use of exclusive ticketing contracts when signing up venues for its ticketing services. Typically, Ticketmaster pays venues an advance on the revenue that it generates from the fees it charges consumers as part of the ticket-buying process. The longer the contract, the larger the advance Ticketmaster can pay out.
DOJ officials don’t like the practice, arguing that it locks out new companies from competing in the ticketing space. Ticketmaster officials, however, argue that they are open to working with non-exclusive contracts — both the Greek Theatre in Hollywood and Red Rocks in Denver are open facilities where promoters use the ticketing provider of their choice — but that venues often rely on exclusive deals to meet their capital needs.
While Ticketmaster holds more exclusive ticketing contracts than any other company, it isn’t the only one to make use of them: Every major competitor pays upfront advances in exchange for exclusive ticketing agreements with venues and sports teams.
That includes SeatGeek, which reportedly paid $10 million in 2021 for exclusive rights to ticket events at the Barclays Center in Brooklyn for a seven-year term. Two years into the agreement, Billboard reported at the time, Barclays Center and BSE Global chief executive Sam Zussman threatened to publicize SeatGeek’s tech problems and breaches of contract if it didn’t immediately agree to terminate the deal.
SeatGeek eventually agreed to wind down its relationship with Barclays Center and was replaced by Ticketmaster. DOJ officials reportedly scrutinized the incident during its investigation of Live Nation.
In the wake of a falling out between RBD and its ex-manager and business partner Guillermo Rosas — a split made public in January when Billboard reported that the two had parted ways — the Mexican band has shared an official statement addressing the ongoing dispute.
In a statement issued Wednesday (May 22), RBD responded to previous claims made by Rosas and his company, T6H, to People En Español that there was “no financial mismanagement” tied to the band’s ultra-successful Soy Rebelde Tour. Hitting back at that characterization, RBD members Anahí, Christopher Von Uckermann, Dulce María, Christian Chávez and Maite Perroni claim that there were in fact “significant irregularities” revealed in a forensic accounting investigation led by Critin Cooperman, alleging that nearly $1 million remains unaccounted for after T6H began receiving funds related to the tour in December 2022.
According to the official statement issued by RBD’s lawyers and shared with Billboard, T6H and Citrin Cooperman — a services firm that acted as a business manager for the tour and also conducted the financial audit — were the “only entities responsible for the tour payments.” None of RBD’s members “had access to manage the money or make payments,” the band claims.
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Furthermore, the band says, T6H has “hindered the process” by not signing “key” documents necessary for the resolution of payments and the tour, which marked RBD’s grand return to touring after splitting in 2008.
Billboard reached out to T6H for comment but did not hear back by press time.
“Given the considerable amount of money involved and the discrepancies found, all our projects are currently on hold. We have had to pause this shared dream with you, including a possible continuation of the tour,” the statement continues. “Our goal has always been to resolve these discrepancies professionally. We remain committed to cooperating with all parties involved to achieve a fair and transparent resolution. Our integrity and the trust of our fans are paramount, and we will not rest until these matters fully resolve.”
In December, RBD wrapped its massive world tour, which, as of Nov. 30, had grossed $197.1 million since launching in August. Rosas also worked with the band as a concert promoter from 2006 to 2008.
Under a new business model designed for RBD’s comeback tour, the five members and Rosas were deemed equal partners in a new joint venture. The deal had the band splitting all new revenue, including for music, with Rosas, who in 2020 helped clear the rights to the group’s catalog. He also brought Live Nation on board as the promoter for the reunion tour and CAA for global representation of the band.
Apple has launched a legal challenge against the 1.8 billion euro ($1.95 billion) fine assessed by the European Commission for breaking competition laws and unfairly favoring its own music streaming service over rivals including Spotify.
According to court records, the U.S. tech giant filed an appeal with the EU’s Luxembourg-based General Court earlier this month.
Details of what is contained in the legal action, listed as: “Apple and Apple Distribution International v Commission,” are not yet publicly available. Representatives of Apple and the European Commission did not respond to requests to comment.
Apple had previously said it would appeal the EU’s fine, which was handed down in March following a long-running investigation triggered by complaints from Swedish streaming service Spotify.
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At the time of the ruling, the European Commission’s Margrethe Vestager said Apple had “abused its dominant position” for almost a decade by restricting rival music streaming apps from informing consumers about alternative, cheaper music services available outside of the App Store.
As a result, many users paid “significantly higher prices for music streaming subscriptions” because of the high fee imposed by Apple on developers, which was then passed on to users, the commission said.
Apple has always strongly denied those claims, arguing that EU investigators had failed “to uncover any credible evidence of consumer harm.” The commission’s decision “ignores the realities of a market that is thriving, competitive, and growing fast,” the tech company said in a statement two months ago.
The nearly $2 billion fine was issued as part of an ongoing EU-wide effort to rein in the global dominance of big tech companies through large financial penalties and regulatory measures.
In March, just a few days after Apple received its penalty notice, new EU rules came into force governing how the largest online platforms operate in Europe as part of the Digital Markets Act (DMA).
The DMA requires the six tech giants designated as “gatekeepers” by the European Commission — Apple, Google parent company Alphabet, Amazon, TikTok-owner ByteDance, Meta and Microsoft — to comply with a raft of provisions, including not favoring in-house services at the expense of third-party providers.
The laws are enforceable by fines of up to 20% of total worldwide turnover (a.k.a. gross revenue) or, in extreme cases, the “last resort option” of forced divestments and the break-up of businesses.
In response, companies like Apple have been overhauling how they operate in the 27-member EU bloc, allowing European users to download rival app stores and lowering the fees charged to developers for purchases made through the App Store.
However, Apple’s plans to charge “high volume” services with over 1 million users a €0.50 ($0.54) “core technology fee” per download, per year, for using alternatives to the App Store has been heavily criticized by a number of European businesses, including Spotify and Deezer.
On March 25, the EU announced that it was investigating Apple, along with Meta and Alphabet, for potential breaches and non-compliance with the DMA’s terms.
Apple’s legal challenge against the commission’s $1.95 billion fine opens yet another battlefront with EU regulators. The tech company has previously had some success in the General Court — the European Union‘s second-highest court, which hears cases brought by companies against the commission.
In 2020, EU judges overturned a previous ruling by the commission that Apple had underpaid 13 billion euros in taxes to the Irish government. That case subsequently went to the European Court of Justice and is still slowly making its way through the legal process.
Apple’s latest court fight could be just as longwinded and take several years before any ruling is made by the General Court, which would also be open to appeal.
Beyoncé, Sony Music and others are facing a copyright lawsuit over her chart-topping hit “Break My Soul,” filed by a New Orleans group that says she sampled from a Big Easy rapper who had illegally lifted lyrics from their earlier song.
In a complaint filed Wednesday (May 22) in Louisiana federal court, members of Da Showstoppaz accuse Beyoncé (Beyoncé Knowles Carter) of infringing their 2002 song “Release A Wiggle” on “Break My Soul,” which spent two weeks atop the Billboard Hot 100 in 2022.
Rather than stealing their material directly, the group alleges that Beyoncé infringed their copyrights by legally sampling the 2014 song “Explode” by the New Orleans rapper Big Freedia. That track, they say, illegally borrowed several key lyrics from their song.
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“While Mrs. Carter … and others have received many accolades and substantial profits … Da Showstoppaz’s have received nothing—no acknowledgment, no credit, no remuneration of any kind,” the group’s attorneys wrote, also naming Big Freedia (Freddie Ross) as a defendant.
“Explode” was one of several high-profile samples on “Break My Soul,” which also heavily pulled from Robin S.‘s house song “Show Me Love.” After the release of the song, Big Freedia thanked “Queen Beyoncé” and said she had been “honored to be a part of this special moment.”
At the center of the new dispute is the phrase “release yo wiggle” and several related variants, which Da Showstoppaz call “unique phrases” that they coined in their song. They say Big Freedia — a well-known rapper in New Orleans’ bounce music scene — infringed their copyrights by using similar phrases in “Explode.”
“The infringing phrase ‘release yo’ wiggle’ and several other substantially similar phrases are featured prominently in the song and evenly spread out across Explode’s two-minute and forty-seven second runtime,” the group’s lawyers wrote. “Any reasonable person listening to ‘Release A Wiggle’ and ‘Explode’ would conclude that the songs are substantially similar.”
Such allegations could face long odds in court. Copyright law typically does not protect short, simple phrases, and a court could potentially dismiss the case on the grounds that Big Freedia was free to use such lyrics even if The Showstoppaz used them first.
But the group’s lawyers aren’t concerned, saying they “have a copyright to their unique and distinctive lyrics” that was clearly infringed by Big Freedia: “The coined term and phrase ‘release a/yo wiggle’ has now become closely synonymous with Big Freedia, thereby contributing to Big Freedia’s fame. However, Big Fredia did not compose or write the phrase, and Big Freedia never credited Da Showstoppaz as the source.”
According to the lawsuit, Da Showstoppaz first learned about Big Freedia’s song when they heard “Break My Soul.” They say they notified Beyoncé and others of the alleged infringement infringement last month, but that she has refused to take a license.
Reps for Beyoncé and Sony Music did not immediately return a request for comment on the allegations.
Elvis Presley’s granddaughter Riley Keough won a court order Wednesday blocking a looming foreclosure sale of the late singer’s historic Memphis home Graceland, after her attorneys argued that the bizarre effort to sell the home was “fraudulent.”
At a hearing in Memphis court, Chancellor JoeDae Jenkins granted Keough’s request for a preliminary injunction that will block the mysterious foreclosure proceeding – initially set for Thursday – until he can rule on her case, according to court records reviewed by Billboard.
As reported by CNN, the judge said during the hearing that Keough would likely win her arguments — and that allowing the sale of the legendary mansion to go through in the meantime would cause her so-called irreparable harm.
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“The estate is considered unique under Tennessee law, and in being unique the loss of the real estate will be considered irreparable harm,” Jenkins said in the hearing.
In a case filed in Tennessee court last week, Keough alleged that the foreclosure was triggered by phony demands from a company called Naussany Investments – an entity that allegedly claims her late mother, Lisa Marie Presley, borrowed $3.8 million and used the famed mansion as collateral.
The alleged loans are recorded in documents supplied by Naussany that feature Lisa Marie’s signature, but Keough’s lawyers say those records are “forgeries” and that she “did not in fact sign the documents.”
“These documents are fraudulent,” Keough’s attorneys write in their May 15 complaint, obtained by Billboard. “Lisa Marie Presley never borrowed money from Naussany Investments and never gave a deed of trust to Naussany Investments.”
Naussany (Naussany Investments & Private Lending LLC) could not immediately be located for comment on Wednesday’s order. An attorney for Keough also did not return a request for comment.
When Elvis died in 1977, his daughter Lisa Marie inherited his estate, including Graceland — a tourist mecca that pulls in millions of dollars a year in revenue. Until her death last year, she served as trustee of the Promenade Trust, an entity that controls the Memphis mansion. When she passed away, Keough assumed that same role and took control of the property.
According to the lawsuit, Naussany alleges it made the multi-million dollar loan to Lisa Marie in 2018 and recorded the transaction in Florida. But Keough’s lawyers say that Naussany is “a false entity created for the purpose of defrauding the Promenade Trust,” orchestrated by a man named Kurt Naussany who has sent “numerous emails seeking to collect the purported $3.8 million debt.”
Keough’s attorneys say the evidence “strongly indicates the documents are forgeries” – most notably, that the notary who allegedly signed off on the transaction has confirmed that she did not do so. “Indeed, she confirmed she has never met Lisa Marie Presley nor notarized any document for her.”
Following Wednesday’s ruling, the case will now proceed toward more detailed litigation over the Keough’s allegations, and eventually toward a final ruling.
“War!” a singer once shouted. “What is it good for?” Well, that depends. In the music business, what can seem like grand ideological conflicts are usually just messy public negotiations over money. That doesn’t mean they’re not brutal, though. And sometimes the amounts at stake turn out to be very much worth fighting over.
The latest industry imbroglio is the National Music Publishers Association’s conflict with Spotify — call it the Battle of the Bundle — which could be worth about $150 million next year. On March 1, Spotify added access to audiobooks to its standard subscription to create a product that it says qualifies as a bundle under the terms of its 2022 legal settlement of the Phonorecords IV rate-setting procedure with the NMPA. Then, as the settlement says it can do, it allocates part of the subscription cost to the audiobook piece of the bundle in order to qualify for a lower payment to publishers.
Whether or not Spotify has a legitimate bundle, it sure has chutzpah — converting all of its U.S. subscribers to bundle customers is a bold move. Now it also has a war on its hands. Already, the NMPA has sent the company a cease and desist for alleged unlicensed content and the allied Mechanical Licensing Collective (MLC) filed a lawsuit about the bundling.
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This is only the response to the attack, though. By trying to cut payments to publishers, Spotify essentially attacked the NMPA, with which the streaming services settled, as well as its president and CEO David Israelite, who actually seems to enjoy this kind of combat. Just to be clear, I don’t think that Israelite literally loves fighting, but I do think he gets a certain satisfaction out of being good at it — he was a champion college debater and he’s a talented amateur poker player. He’s the kind of opponent who thinks strategically, sees several moves ahead and fights on a number of fronts at once.
The obvious fight will be the lawsuit filed by the MLC, which is likely to be long and expensive — think of it as a long slog of a ground war. The expense of that will be borne by the streaming services, though, since they fund the MLC’s operations under the provisions of the Music Modernization Act. But Israelite will attack on other fronts as well. The cease-and-desist letter marks the beginning of probing attacks, each one small. Spotify now licenses the works it uses but are there a few hundred uses of some works that might have slipped through the cracks? At a maximum of $150,000 per work in statutory damages for willful infringement, those oversights add up fast. Just as important, a slowdown in licensing for other uses, including video, could keep Spotify from moving forward with some of its plans to compete with Apple and Amazon.
Israelite will also move forward with what one might call sanctions, by trying to organize different parts of the music business against Spotify, much as Universal Music Group did with TikTok. Most years, the June NMPA Annual Meeting includes the music business version of Two Minutes Hate for an online company that’s not paying or underpaying rightsholders. That’s in less than a month. It’s hard to know how successful this will be, but it seems reasonable to assume that Spotify is going to have a much harder time booking acts to play its party during next year’s Grammy Week.
Israelite has also said he plans to take the fight to Capitol Hill with a legislative proposal to give publishers and songwriters more negotiating power. (If war is just the continuation of policy by other means, as Carl von Clausewitz has it, can’t the reverse also be true?) The odds of passing this legislation soon don’t seem all that high — right now the odds of passing any legislation soon don’t seem all that high — and if publishers and songwriters had the power to make it happen, they would have been trying already. But it starts a conversation that the NMPA wants to start, and it opens a front where the NMPA can fight at an advantage, partly because Israelite, a former Hill staffer, would fight on his home turf. Could the NMPA could get a hearing on the topic of songwriter pay that would embarrass Spotify? The company could argue that it needs margin relief, and it does, but how would that look on TV?
If this sounds like an incredibly elaborate and expensive way to figure out the definition of a bundle, you’re missing the point. Because it is, but also because no one cares. The point, for the NMPA, is to force Spotify to concede, through some combination of litigation, legislation and PR. Strong spotlights create a harsh glare. From Spotify’s perspective, looking for copyright infringement that fell through the cracks might seem like an aggressively-literal reading of the law. But isn’t an automatic bundle aggravatingly literal in its own right?
There’s also a theory that Israelite needs to get music publishers out of a situation he got them into, since he backed the 2022 settlement that allowed for bundles, but this is unfair. Under the decision in the rate-setting case before this, Phonorecords III, bundles were allowed and could be accounted for by subtracting the value of one from the total price, then using the remainder to calculate royalties. Under the Phonorecords IV settlement, bundles must be accounted for proportionally, which is far from ideal but a bit better. Obviously, Israelite and the NMPA thought they could get a better deal by settling the case than fighting it out in court, at great expense, and the NMPA board approved it. Arguably, they’d have ended up fighting either way.
That brings up another question: Phonorecords IV only covers the period through the end of 2027. Before that, both sides will go back to rate court, each more inclined to fight and less apt to settle. Whatever happens, the publishers will lose predictability and Spotify will look bad, especially compared to its rival streaming services. There could be a long, grinding Cold War that really will be good for nothing.
Singer-songwriter Vincent Mason, known for his viral hit “Hell Is a Dance Floor,” has signed a label deal with Interscope Records/UMG Nashville/Music Soup, the companies tell Billboard. Mason has been releasing music via Music Soup since his first release, so the deal marks a continuation of his work with that company. The Georgia native’s debut […]
An Earth, Wind & Fire tribute act will pay the legendary R&B group $750,000 in damages for using its trademarked name in ways that a federal judge called “deceptive and misleading.”
The payment, announced in a court filing Tuesday, will effectively end a year-long lawsuit in which the band alleged that the tribute act — “Earth, Wind & Fire Legacy Reunion” – infringed the trademark rights to the famous name by suggesting it was the real thing.
Earlier this year, the federal judge overseeing the case sided with Earth, Wind & Fire, ruling that the tribute act’s conduct had been “deceptive and misleading.” A trial had been scheduled to figure out how much Legacy Reunion would need to pay, but the two sides reached an undisclosed settlement on that question last week.
In Tuesday’s filing, the judge disclosed the total that Legacy Reunion had agreed to pay – $750,000, plus interest — a rare step following settlements, which are typically kept private. Neither side immediately returned requests for comment.
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Earth, Wind & Fire has continued to tour since founder Maurice White died in 2016, led by longtime members Philip Bailey, Ralph Johnson and White’s brother, Verdine White. The band operates under a license from an entity called Earth Wind & Fire IP, a holding company controlled by Maurice White’s sons that formally owns the rights to the name.
Last year, that company filed the current lawsuit, accusing Legacy Reunion of trying to trick consumers into thinking it was the real Earth, Wind & Fire. Though it called itself a “Reunion,” the lawsuit said the tribute band contained only a few “side musicians” who had briefly played with Earth, Wind & Fire many years ago.
“Defendants did this to benefit from the commercial magnetism and immense goodwill the public has for plaintiff’s ‘Earth, Wind & Fire’ marks and logos, thereby misleading consumers and selling more tickets at higher prices,” the group’s lawyers wrote at the time.
Tribute acts — groups that exclusively cover the music of a particular band — are legally allowed to operate, and they often adopt names that allude to the original. But they must make clear that they are only a tribute band, and they can get into legal hot water if they make it appear that they are affiliated with or endorsed by the original.
Ruling on the case last month, Judge Federico A. Moreno said the evidence pointed “overwhelmingly” in the band’s favor. In particular, the judge cited angry social media posts and emails from fans who attended the “Reunion” shows because they thought it was the original band — proof of the kind of “actual confusion” that’s crucial evidence in a trademark lawsuit.
“It is not a far cry to think that an average consumer looking for an Earth, Wind & Fire concert would believe that they could acquire that experience from either plaintiff or defendants,” the judge wrote.
Following Tuesday’s order, the only remaining issue in the case is an injuction permanently banning Legacy Reunion from infringing the name. That issue will be subject to future rulings clarifying exactly what it will cover.
Recently, Spotify has reclassified its premium individual, duo and family subscription services as “bundled subscription services” in an ill-informed attempt to deprive songwriters and music publishers of their rightfully earned U.S. mechanical royalties. As a result, the agreed-upon revenue share rate for Spotify premium, currently 15.2%, may effectively be reduced to less than 12%, depending upon a number of factors. Losses to songwriters and publishers, estimated by Billboard to be $150 million on an annualized basis, will undoubtedly increase over time as subscription revenue and users grow.
Let me say straight away that this column is not intended to embarrass or disparage Spotify in any way. Quite the opposite: This is a respectful appeal to the company, specifically its senior leadership team, to do the right thing by songwriters, regardless of what strategies they appear to believe are legally permissible.
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Spotify has an unfortunate and documented history of punching down at songwriters and music publishers. In just the last few years, this includes appealing the Phonorecords III decision, which reasonably raised the mechanical royalty rate from 10.5% to 15.1% of revenue over a five-year period (while also providing discounted terms for family and student accounts that are beneficial to Spotify and other music services). Almost immediately after serving notice of its intention to appeal Phonorecords III, Spotify moved to retroactively implement the Copyright Royalty Board’s final pre-appeal decision and clawed back a multi-million-dollar credit from songwriters and music publishers throughout 2019. The appeal and remand process lasted for many years, ultimately delaying the payment of a large amount of mechanical royalties, including those earned during the hardship of the COVID-19 pandemic, until February 2024. And finally, in late 2021, Spotify proposed statutory rates for 2023-2027 that the NMPA referred to as the “lowest royalty rates in history.”
While the settlement of Phonorecords IV in 2022 was celebrated by both streaming services and music publishers, Spotify and other DSPs had especially good reason to rejoice. The settlement provides that revenue share rates minimally increase from the prior rate of 15.1% to 15.35% over a five-year period while also providing for discounts related to not only family and student accounts but also Spotify duo —subscription tiers that are meaningful to Spotify given the strong growth of family and duo plans, as the company has noted in earnings reports. The settlement also provides specific terms for DSPs that choose to bundle a qualifying music subscription service with other products and services.
It’s difficult to imagine why Spotify could have any degree of buyer’s remorse concerning the Phonorecords IV settlement or deliberately attempt to manipulate its terms given how clearly reasonable and fair it is. Spotify presumably entered into the settlement with the full knowledge and acceptance that it was agreeing to pay the revenue share rates of 15.1% to 15.35% upon a properly undiluted revenue base, as it had been doing until March 2024.
But Spotify has again devalued the contributions of songwriters to its platform, a move that has been described by rights and advocacy organizations as “cynical,” “potentially unlawful,” “greedy” and “offensive.”
I’ve been asked a lot in recent weeks why Spotify is doing this. The answer, other than perhaps “because they believe they can,” is simple. I believe that Spotify is unjustly attempting to reduce the amounts it pays to songwriters and music publishers in order to (1) effectively use the displaced royalties to offset the costs of running its audiobook business and (2) improve its margins.
Spotify’s reframing of the vast majority of its subscription services as bundled subscription services is a work of fiction. It has done so, in part, by launching a standalone audiobooks access tier that does not appear commercially attractive to users and was launched, at least to an extent, to support its “bundling” strategy. As noted in the Mechanical Licensing Collective’s (the MLC) legal complaint against Spotify, the audiobooks access tier is largely hidden from view on Spotify’s website on a page where the primary purpose is to steer subscribers to premium, not audiobooks access.
The audiobooks access tier is also only available in the United States, the only country to which the Phonorecords IV settlement and accompanying statutory framework applies, and is notably not available in any other country where audiobooks are available in premium. Spotify’s intent is rather obvious on its face, but to think that the availability of the audiobooks access tier as implemented is something of a silver bullet that qualifies it to reclassify its premium individual, family, and duo tiers as a bundled subscription service is a true mark of acting in bad faith. To do so when Spotify is reportedly on the cusp of rightfully raising prices in the United States is all the more insulting.
In the wake of the ire directed at Spotify from songwriters and the music publishing community in recent weeks, the company has issued statements to Billboard and other media.
First, Spotify has stated that it is simply doing what other services have done with bundled products. In my opinion, this is misleading. The Spotify competitors that have availed themselves of bundle reporting methods have done so for products that are bona fide bundles consisting of individually available services and products that hold a clear commercial value, and to which users actively elect to subscribe. Spotify has even done this itself for bundled products on a more limited basis, in the manner actually intended by the Phonorecords IV settlement and its predecessors. But as the MLC’s legal filing against Spotify notes, anyone who subscribed to Spotify premium prior to November 8, 2023, did not elect to receive audiobooks content or functionality. Many premium users have not utilized audiobooks even once; and, as of this writing, a non-student Spotify subscription without audiobooks does not even exist.
Spotify has also been quick to point out that music publishers “agreed to and celebrated” the Phonorecords IV settlement. I can assure readers there is no world in which the music publishing community truly believed that it was agreeing to bundling provisions in the manner in which they are being abused by Spotify to drastically reduce its payments to songwriters and music publishers. At minimum, Spotify’s actions clearly violate the spirit of the agreement, and to say otherwise is blatantly dishonest. To the extent Spotify may believe it has outsmarted songwriters and music publishers, there should be no pride in ownership.
Finally, Spotify has stated that it “paid a record amount to publishers and societies in 2023 and is on track to pay out an even larger amount in 2024,” which presumably refers to Spotify’s global rather than U.S. domestic spend on music publishing royalties. This may be true given Spotify’s growth trajectory, which as of its most recent reporting was up 20% year-over-year in revenue and up 14% in premium subscribers. However, it is wholly irrelevant and a deflection from the issue. Simply paying more from one year to the next does not atone for the grave offense at hand. The amount of royalties paid is not the only pertinent metric.
Spotify has repeatedly stated its desire to become a more efficient and profitable company. I applaud that. Spotify operating profitably is good for the music business — including songwriters and music publishers. And Spotify is welcome to spread its wings and invest in new areas of business such as podcasts and audiobooks. But let’s be clear: The royalties that Spotify pays to songwriters and music publishers (and other music rightsholders including record labels) are not preventing it from becoming or remaining profitable.
Spotify has said on multiple occasions, including during its 2022 investor day presentation, that it has chosen to prioritize growth over profitability and has done so deliberately and willingly. Its music gross margin has operated at strong numbers and improved over time, in part thanks to its marketplace initiatives, but overall gross margin has been dragged down by investments the company has made in the podcast space. Not all of those investments, including content deals and acquisitions of other companies, have produced positive results, as is well documented in various media, and Spotify has since pivoted to operate more efficiently and better ensure that its costs do not grow quicker than its revenue.
The royalties Spotify pays to songwriters and music publishers are not the problem, nor are the royalties it pays to others. Spotify receives tremendous value in exchange for the mechanical and other royalties that it pays for musical works, and songwriters should not be treated by Spotify as a drag on its margins. To pay slightly north of 15% of revenue for songwriters’ creative output is a gift, and there is absolutely no reason for Spotify to sneak around corners to dilute songwriters’ income. It is beyond the pale, even relative to actions that Spotify has taken against songwriters and publishers in recent years.
I love Spotify and have been a user since the very beginning. But I value the songs upon which it has built its entire business even more. Spotify is a house built by songwriters. In the modern listening environment, which heavily depends upon personalization, recommendations and playlists, songs and songwriters are an even more crucial part of the infrastructure and the value conveyed to consumers who pay Spotify subscription fees.
I’ve often said that compensating songwriters in accordance with the value that they bring to music streaming platforms is not only good business but also good for business. Spotify’s relationship with songwriters and publishers, whether it realizes it or not, is mission-critical and not just about maintaining positive sentiment. Given the global stature of Spotify and the company’s interest in various content types including podcasts, music videos and lyrics, returning its relationship with songwriters and publishers to a respectful position is important to its future. Unfortunately, Spotify’s relationship with the songwriter and music publishing communities that it has built its business upon is now more fraught and damaged than ever. Trust has been almost entirely eroded. That cannot merely be chalked up to, as Spotify stated during its most recent earnings call, “natural tensions between suppliers and distributors.” But it may not be too late to fix things.
Here is my genuine and respectful appeal to Spotify, and it’s not a big ask: Please voluntarily honor the Phonorecords IV settlement on the intended terms that you know fully well were agreed to and promptly reverse course on your misguided attempts to reduce U.S. mechanical royalties in this manner. Songwriters and the broader music publishing community will thank you. If this is too much to ask, I believe the songwriting community will never want to hear another word from Spotify about, to use the company’s own words, “giving a million creative artists the opportunity to live off their art.”
Adam Parness was the global head of music publishing at Spotify from 2017 to 2019. He currently operates Adam Parness Music Consulting and serves as a highly trusted and sought after strategic advisor to numerous music rightsholders, notably in the music publishing space, as well as popular global brands, technology-based creative services companies and firms investing in music and technology.
Veteran venues executive Tim Worton is leaving the live entertainment industry for a new career path.
Worton will step away from ASM Global at year’s end, at which time he will enter 12 months’ full-time studies at Moore Theological College in Sydney. When completed, Worton is keen to work in a pastoral, chaplaincy or ministry role.
Sydney-based Worton has logged 33 years in the entertainment business, including 25 years with ASM Global (previously AEG Ogden). For the past 19 years, he has served as the venues and event management specialist’s group director of arenas for APAC.
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“Tim has been a great ambassador for our organization. He has made an admirable and life changing decision to follow his faith and we applaud his decision and wish him well,” comments ASM Global (APAC) chairman and CEO Harvey Lister.
“Tim’s leadership and executive management of the arena portfolio is demonstrated by the continued growth of the Group’s arenas through innovation and ongoing development of entertainment content for audiences.”
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The announcement of Worton’s career pivot was made during the 31st Asia Pacific Venue Industry Congress held at the Brisbane Convention & Exhibition Centre (BCEC). According to organizers, this year’s edition welcomes 554 registered attendees, a new record, for a program running across 23 sessions and featuring 79 speakers.
During the VMA Awards on Tuesday night (May 21), celebrating the final evening of the confab, Worton was presented with the trade body’s 12th honorary lifetime membership.
Worton joined the VMA as a member in 1994, a year after the establishment of the association, and served on its board from 1997-2003, and was the association’s president during the period from January 2001 to May 2003. In 2022, the VMA’s council created an category in his honor, the Tim Worton Award for excellence in the area of education, becoming its first recipient.
Reflecting on his career, Worton says, “helping to ensure there is plenty of live content and the company’s arena network is operationally and financially successful is a key part of my role. What I have loved most about my career is supporting and mentoring colleagues, helping to create opportunities for future development.”
The 2024 Congress marked Worton’s 30th consecutive, and final, in attendance.