A settlement has been reached between Spotify and The National Music Publishing Association (NMPA) over unpaid royalties, resulting in the streaming service being forced to pay out $30 million.
According to Billboard, Spotify will establish a $30 million payment pool and, beginning in April 2016, NMPA members will have a 3-month window to opt into in order to be paid their owed royalties.
Once publishers prove ownership of their music, Spotify will pay royalties based on the actual plays of the specified songs, to be taken out of the $30 million payment pool.
A statement from Spotify’s Jonathan Prince reads: “As we have said many times, we have always been committed to paying songwriters and publishers every penny.
“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.”
David Israelite, NMPA president and CEO had this to say on the settlement: “NMPA’s goal has always been to ensure publishers and songwriters receive the money they deserve.”
“I am thrilled that through this agreement both independent and major publishers and songwriters will be able to get what is owed to them. We must continue to push digital services to properly pay for the musical works that fuel their businesses and after much work together, we have found a way for Spotify to quickly get royalties to the right people. I look forward to all NMPA members being paid what they are owed, and I am excited about the creation of a better process moving forward.”
The settlement covers a time frame from Spotify's launch to June 30, 2017, with an extended renewal period of 2 years, to June 30, 2019.
Over the past few months Spotify has been under fire with a pair of lawsuits being brought against the streaming service. The company is being accused of unlawfully providing and distributing copyrighted material to it's 75 million subscribers without obtaining proper licensing. Spotify has motioned that those charges be dropped.