Spotify Pulls Thousands Of Songs Over Royalty Squabble

All is not well on the Spotify front, with the music streaming service pulling thousands of songs from its library over an issue with royalties. The songs are covered under Victory Records, an indie label located in Chicago. On Tuesday night, most of the label's songs were pulled, the reason revolving around troubles with how the royalties for the songs were determined and paid. Reportedly, Spotify failed to pay the songwriting portion of the royalties for up to millions of songs.

According to The New York Times, Victory hired a tech company that works in finding unpaid royalties, Audiam. That company looked over Spotufy's royalty payments and reportedly found that Spotify didn't pay the aforementioned royalties on up to 53 million Victory Records songs. In essence, Victory says the numbers were "30 percent off, meaning we were 30 percent underpaid."

Says Victory's founder Tony Brummel, Spotify did not advise ahead of time that it would be removing the label's songs. A Spotify spokesperson, speaking to the Times, countered that, saying the songs were pulled after it had received an email from them. According to that spokesperson, the company "construed [the email] to be a takedown notice, and felt that we had to take the content down."

It all appears to be messy, though, as Victory's founder dismisses that, stating, "We made no indications of any legal and/or litigation threat at any time, and have never contemplated such." According to Victory and Audiam, Spotify has been provided with data in support of its royalty claims going back as far as January 2012.

Royalties for music streaming have been a long running source of contention between music services and the music industry.

SOURCE: New York Times