A dispute has arisen between online music streaming giant Spotify and Chicago-based label Victory Records, who are behind bands like Streetlight Manifesto and A Day to Remember, over alleged unpaid royalties.
As Billboard reports, by some industry estimates, as much as 25 percent of mechanical royalties due to publishers and songwriters are going unpaid by streaming services due to identification difficulties.
When Victory decided to ask Spotify about their own missing share of royalties — Audiam identified 53 million streams that Spotify hand’t made payments on — the streaming outlet pulled down thousands of songs from the label’s catalog.
Audiam is a digital distribution and monitoring company founded in 2014, which helps songwriters and publishers ensure they receive proper payments from digital services by monitoring streams and subsequent payments.
As Billboard reports, before undertaking a comprehensive audit, Audiam provided Spotify with the results of its audits for January and June 2014 for Another Victory’s catalog as well as back-up data.
Using Spotify’s royalty statements on Victory Records’ master recordings, Audiam found that of the 3,245 recordings that Another Victory holds a stake in, only 1,062 had received payment from Spotify.
This leaves 2,183 songs in which Another Victory has a publishing stake but did not receive mechanical royalty payments, accounting for 53 million total streams for those songs. The amount left unpaid amounts to nearly $23,000.
Spotify has since told Billboard they are working to resolve the issue. And while some say the removal of portions of Victory’s catalog was a measure to prevent possible legal ramifications, others speculate it was a punitive action against Victory.“Interestingly, Victory Records has its own history of non-payment of royalties.”
Before Spotify pulled down Victory’s music, they attempted to get Another Victory to agree to a direct license, but since Victory already had a contract with Audiam, label owner Tony Brummel said he couldn’t consider that option.
“It sounds like Spotify fired shots across the bow,” one publisher told the Wall Street Journal, adding that Brummel “is not a guy you want to shoot at” and that the situation “should get very entertaining”.
In a statement, via Digital Music News, Victory Records said the dispute proves Spotify’s “internal systems are inadequate” and that the label initially requested their catalog not be pulled, offering to work “amicably” with Spotify.
“They haphazardly removed our content regardless,” the statement continues. “53,000,000 streams, as per Spotify’s statements, were identified with no publishing royalties being paid by Spotify.”
“Late yesterday, Spotify sent over a document giving them mechanical clearance to use our music. We could not sign said document for a variety of reasons, most importantly, that it would put us in direct violation of our agreement with Audiam.”
“Spotify knows we are in business with Audiam and were essentially asking us to breach/ignore that agreement. The issue of nonpayment for songwriters and composers is a widespread problem and not exclusive to Victory Records’ artists.”
“We understand your frustration with not being able to listen to the music you enjoy (and most pay for via subscription). The bottom line is that artists and songwriters are not being paid and fans of Victory’s artists cannot listen to the music.”
Interestingly, Victory Records has its own history of non-payment of royalties. As Kill Your Stereo reported back in 2011, A Day To Remember took Victory to court for breach of contract, claiming the label owed them over $75,000 in royalties.