Less than a year after signing licensing deals with the majors, Spotify is stirring the pot once again

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Less than a year after signing licensing deals with the majors, Spotify is stirring the pot once againSpotify Major Labels Min

Spotify is trying out new business models that test its relationship with major labels. Just a year after renegotiating licensing deals with major labels, Spotify is pushing back against what got them into the industry’s good graces in the first place. The Swedish streaming giant and the record companies that produce its content continue to publicize their tumultuous relationship.

Spotify has already expressed interest in acquiring music by licensing directly from independent artists. They rely heavily on Universal, Warner, and Sony to supply their 35-million-song catalog and recently have been paying advances to management firms and other artist-representation groups in order to obtain direct deals. The major labels see this as Spotify cutting into their territory, and with the current licensing deal, Spotify is not allowed to compete in a substantial or meaningful way with labels’ main businesses. CEO Daniel Ek said “We are not acting like a record label;” however, industry veterans told The New York Times they are growing weary.

Another strain on the relationship comes from music videos. Spotify has started offering video with audio on mobile devices, and they have to pay majors to publish their videos. This has caused disputes over how much the streaming behemoth owes for using those videos. Universal Music Publishing executive Marc Cimino told Bloomberg they want “to allow our digital partners to experiment and at the same time make sure our songwriters are paid properly.” On the other hand, Spotify is arguing their platform’s method of distribution is worth more than what’s credited.

As the methods of distribution shift, this contentious relationship between music licensincing and publishing appears natural. It’s highly unlikely labels or publishers will ever abandon Spotify entirely; however, labels are making it clear they’re restricting Spotify’s leverage in the industry.

H/T: Rolling Stone

The Music Modernization Act takes another step towards fair compensation for music curators

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The Music Modernization Act takes another step towards fair compensation for music curatorsJomar 271602 Unsplash

The Music Modernization Act (MMA) has passed unanimously in the Senate Judiciary Committee, taking music creators a step closer to appropriate licensing and royalty rules for the streaming era. It now has to pass a full Senate vote before hitting the president’s desk.

The music copyright overhaul essentially partners Apple Music, Spotify, and publishers under a single licensing agency, streamlining the license management process. Songwriters and accredited artists will be paid out for songs recorded before 1972, while new rights will be granted to music producers and mixers. Older musicians who missed the streaming boom and studio engineers look to benefit here in the form of royalty checks coming their way if passed.

One of the most important facets of the bill is an overall standardization of payment rates between distribution services and rights-holders. It’s about time music law addressed the streaming industry because the current system is still set up for physical music copies.

Although the MMA has received criticism for its lack of consideration towards medium-sized business, most in the industry are in favor, seeing this as a long-awaited, financial organization of the current music landscape. D.I.Y. musicians, and musicians who own their own rights might still have trouble policing ineffective or inefficient licensing practices. More established artists, publishers, studio producers, and labels labels will benefit, giving them more time to focus on creating music and less time worrying about licensing and royalty structures. It’s a step in the right direction on this long trek towards fair compensation for music creators.

H/T: Rolling Stone

Photo Credit: Jomar/Unsplash