Spotify pledges to pay out $21 million to publishers and music writers

Spotify has reached an agreement with the US National Music Publishers’ Association on alleged unpaid royalties in cases with unknown ownership details. The music streaming service will pay out $21 million to publishers and music writers.

Of the 21 million dollars, converted approximately 18.5 million euros, 5 million is a bonus fund for publishers and writers who agree to the agreement. With this, Spotify probably wants to prevent publishers from starting lawsuits against its service independently of the NMPA.

Part of the agreement is the development of a method for publishers to easily recognize songs and claim royalties when they are covered by their licenses. The deal also aims to provide a direct way for the rights owners to license Spotify to stream the music.

The promised $21 million will be paid out in full, even if not all music is claimed. The agreement states that all unclaimed amounts will be paid out to the participants in the agreement on the basis of their market share. Publishers and music writers will have three months from April to claim compensation for their music.

Spotify has been involved in several lawsuits for non-payment of royalties. The most recent of these cases is still pending and involves a $150 million claim for lost revenue and damages. It is possible that many of the claimants will drop the case because of the settlement. When the NMPA made a deal with YouTube in 2011, most of those involved went along with it.

Both Spotify and the NMPA claim to be happy with the deal. The NMPA sees it as the payout of the money to which its members are entitled and is also pleased that it will be easier to claim the rights to music in the future. Spotify says it has always been intended to pay writers and publishers.