Spotify says it can’t pay songwriters better royalty rates. He also spends $320m on a sponsorship deal with Barcelona.
“It’s natural that everyone wants a bigger slice of the pie. But this cannot come at the expense of continued industry growth via streaming.
So said Spotify in 2019, trying to convince US songwriters that its legal challenge to their recently imposed streaming pay rise wasn’t actually the economic equivalent of jamming a coat hanger. rusty in their unspeakable – it was, in fact, simply the right and pragmatic thing to do.
The indication in the words of Spotify, there? There isn’t enough money in the current streaming pie structure for songwriters to be paid more, without hurting Spotify’s ability to operate successfully.
This argument was even clarified in a 2016 submission by Spotify’s Paul Vogel to the Copyright Royalty Board, in which he stated – surprisingly direct quote – “Lower royalty rates are essential for the future of Spotify”.
Since Spotify’s declaration in 2019, its attempt to recover money from songwriters in the United States has taken to the next level.
SPOT’s initial appeal against US songwriter pay increases, as judged by the Copyright Royalty Board, covered the years from 2017 to 2022.
But in October 2021, it became common knowledge that Spotify was now Also also trying to scrap streaming songwriter pay rates for the next five years (2023-2027).
In both cases (2017-2022; and 2023-2027), Spotify wants to keep songwriter salaries fair. 10.5% income from his service (with additional “carve out” deductions for the last period).
That’s about a third of what Spotify itself keeps from its subscription and ad revenue (i.e. a 30% cut). And that reflects a songwriter royalty rate that Guy Moot and Warner Chappell’s Carianne Marshall yesterday (February 7) called “terribly low”.
So remember: Spotify says it can’t spare any more money to pay songwriters a better royalty rate.
Indeed, he argues that not doing so is such an essential red line that it is literally “critical” for the future of his business.
Now for totally unrelated news: Spotify is reportedly about to strike a deal to splurge 320 million US dollars (280 million euros) on a new sponsorship deal with Spanish football team Barcelona.
According to the Guardianthe deal would see the Spotify logo splashed on Barca players’ shirts, and would also come with naming rights for Barcelona’s historic stadium, the Camp Nou.
The Spotify deal is expected to be announced this week and will come into effect this summer after Barcelona’s contracts with main sponsor Rakuten and secondary sponsor Beko come to an end.
Amid Spotify’s reported negotiations with Barcelona, club CEO Ferran Reverter stepped down this week ‘for personal and family reasons’.
MBW is unaware that Reverter is a credited songwriter on major pop compositions.
Spotify announced its fourth quarter 2021 results last week.
He confirmed that his Premium subscriber base had grown to 180 million by the end of December.
It was by 8000000 the subscribers (5%) on the 172 million the company had at the end of the previous quarter (Q3 2021)The music industry around the world