Spotify’s relationship with music artists is… not so good. Thanks to issues with how it distributes royalties, many artists have complained that they’re not properly compensated for their songs that are streamed through Spotify, and some big name artists like Adele and Taylor Swift have withheld content from the service in protest. In order to solve this, Spotify is reportedly working on a new system that will ensure artists are paid more fairly and more quickly by fixing one of the biggest problems it has with distributing royalties: not knowing who the hell it’s distributing them to.
Industry sources say that Spotify currently owes publishers and songwriters about $25 million for music played on its U.S. service. A source close to Spotify puts that number closer to $17 million. Against a backdrop of controversy over interactive music services not properly licensing songs or paying publishing royalties to music publishers and songwriters, Spotify’s global head of publisher relations James Duffett-Smith has posted a blog on the service’s website, writing that the company “will invest in the resources and technical expertise to build a comprehensive publishing administration system to solve this problem.” According to sources, Spotify will work in conjunction with the National Music Publishers’ Assn. and other publisher organizations around the globe to build a music publishing database that, when completed, will properly manage licenses and publishing royalties distributions going forward. While some applaud the move, saying non-payment and compliance is a mess that can and should be fixed, others say it’s something the company should have prioritized from the start — instead of chasing a billion-dollar-plus valuation at the expense of proper payments to publishers.