Spotify reached a deal with the National Music Publisher’s Association to pay $21 million in unpaid royalties to music publishers. The agreement allows the publishers to get royalties for songs on the music app in the United States where “ownership information was previously unknown.”
The $21 million includes about $16 million for royalty payments and a $5 million bonus fund for publishers and songwriters who agree to the deal. The Verge adds that the deal covers all content between the time Spotify began streaming until June 30, 2017.
Spotify has been the target of lawsuits surrounding unpaid royalties, including one recently that demands $150 million in damages. Spotify hopes that this deal with the NMPA could waylay any future lawsuits and placate publishers and songwriters who feel infringed upon.
If history is anything to go by, Spotify could be right. The NMPA struck a deal with YouTube in 2011 and most of its constituents opted in instead of seeking their own lawsuits against the website.
In a statement about the deal, Spotify Global Head of Communications and Public Policy Jonathan Prince told Business Insider, “As we have said many times, we have always been committed to paying songwriters and publishers every penny.”
Prince added, “We appreciate the hard work of everyone at the NMPA to secure this agreement and we look forward to further collaboration with them as we build a comprehensive publishing administration system.”
The NMPA added that the deal includes payment of bonus compensation, lets songwriters and publishers identify and properly claim “unmatched” works online, and ensures Spotify will continue working with the NMPA to match works accurately and efficiently. The deal also “provides a path to direct licensing between Spotify and publishers, with the goal of strengthening business relationships.”
Publishers and songwriters can use a claiming portal for a period of three months beginning in April to make claims for unpaid royalties or mismatched content. Any unclaimed funds after that period will be distributed to publishers and songwriters based on their market share on Spotify.