It’s
no secret that some artists aren’t fans of Spotify, and part of this
has to do with the way the company handles royalties, but this isn’t a
problem specific to the streaming service. Royalties have always been a
complex issue, since they vary greatly between countries and different
publishing agreements.
Spotify
announced this week that the company is beginning work on a publishing
administration to help ensure that artists are paid more fairly, and for
some, more quickly. Part of the problem that the system is designed to
solve is that sometimes, Spotify just isn’t sure who exactly to pay for a
given track.
“When
one of our listeners in the U.S. streams a track for which the
rightsholder is not immediately clear, we set aside the royalties we owe
until we are able to confirm the identity of the rightsholder,” a post on the Spotify Artists blog reads. “When we confirm the rightsholder, we pay those royalties as soon as possible.”
The
company says that this amount totals less than 1 percent of the
royalties it has paid to date. Still, considering that the company says
it has paid “well more than $3 billion” in royalties to date, this could
still be a sizeable portion of royalties that artists haven’t yet
received.
The
amount currently owed to artists and publishers for music played on its
U.S. service — including the amount set aside for unconfirmed
rightsholders described above — could range from $17 million to $25
million, Billboard reports.
“In
the meantime, we have been working closely with our partners and
friends in the industry, especially the National Music Publishers
Association (NMPA), to find the best way to correctly pay the royalties
we have set aside to the right publishers and songwriters,” Spotify’s
blog post reads.
How
much this system will help to solve a complex problem remains to be
seen, but one thing is certain: it’s going to be a while until it is put
in place. Spotify says its publishing administration system will take
“significant time and effort.”
By: Kristofer Wouk (Digital Trends).
Review: Emerging Market Formulations & Research Unit, Flagship Records.
For The #FacebookTeam