Spotify’s biggest legal headache now has a price tag: $1.6 billion.
Spotify’s legal issues are escalating rapidly, and threatening to derail its highly-anticipated IPO. Now, an ongoing lawsuit involving some the largest musicians in the world has turned into a $1.6 billion demand.
Back in September, DMN projected cumulative legal damages hitting ‘one billion plus’ with 10 potential litigants. Looks like those estimates were st.
Enter Wixen Music Publishing, which is leading the charge alongside a troupe pissed-f publishers. All those publishers (and songwriters) claim that Spotify has attempted to bypass mechanical licenses.
Accordingly, Wixen is demanding roughly 3% Spotify’s cumulative revenues, based on the importance its artists. That works out to roughly $1.6 billion — and counting.
And who might those artists be? As previously reported, the list includes Petty, Neil Young, Kenny Rogers, Stevie Nicks, and key members Steely Dan, the Eagles, Rage Against the Machine, and Weezer. None these artists feel that a recently-forged class action settlement is properly valued.
Wixen Music president Randall Wixen remains resolute in his determination to secure proper mechanical licensing.
But Spotify is bristling back. Amidst billions in liabilities, the company has argued that mechanical licenses don’t apply to streaming. After all, a mechanical is for a reproduction a work, and Spotify merely streams the work without duplicating files.
Wixen begs to differ with that legal interpretation. “We’re just asking to be treated fairly,” Randall Wixen subsequently told Variety.
“We are not looking for a ridiculous punitive payment. But we estimate that our clients account for somewhere between 1% and 5% the music these services distribute.”
Wixen also pointed to outrageous Spotify largesse, including high-priced salaries and fices. “Spotify has more than $3 billion in annual revenue and pays outrageous annual salaries to its executives and millions per month for ultra-luxurious fice space in various cities,” Wixen continued.
“All we’re asking for is for them to reasonably compensate our clients by sharing a miniscule amount the revenue they take in with the creators the product they sell.”
+ Spotify Executives Are Earning Seven-Figure Salaries, Tax Returns Show
Spotify’s high-priced lifestyle isn’t helping. Just recently, Spotify secured extremely-pricey fice leases in both Manhattan and Stockholm. That has been complemented by 7-figure salaries for top executives, and standard six-figure salaries for many staffers.
Those payouts absolutely dwarf payouts to content creators, especially songwriters.