David Lowery talks to adland about the Spotify lawsuit

The bombshell dropped on Big Tech today when it was reported David Lowery filed a $150 million dollar class action lawsuit against Spotify. In response, Spotify has released a statement:
"We are committed to paying songwriters and publishers every penny," says Spotify global head of communications and public policy Jonathan Prince in a statement. "Unfortunately, especially in the United States, the data necessary to confirm the appropriate rightsholders is often missing, wrong, or incomplete. When rightsholders are not immediately clear, we set aside the royalties we owe until we are able to confirm their identities. We are working closely with the National Music Publishers Association to find the best way to correctly pay the royalties we have set aside and we are investing in the resources and technical expertise to build a comprehensive publishing administration system to solve this problem for good."
And while it is correct to say that Spotify is working wth the National Music Publishers association while also investing the money, the class action lawsuit alleges the company "knowingly, willingly, and unlawfully reproduces and distributes copyrighted works without obtaining the proper mechanical licenses," with the operative words in that sentence being "knowingly" and "willingly."
With Spotify's response above, we reached out to Mr. Lowery to see if he had anything to say beyond the press release, and we spoke as he was on the road somewhere between King City and San Francisco en route to another Cracker/Camper Van Beethoven show.
My first question concerned the number of songwriters who may be missing royalty payments owed to them by Spotify. A class-action lawsuit, by definition means a hundred or more parties. "The class is actually larger than that," he said. "Part of it is you go through the discovery and figure out what it is (and how many are affected). As far as artists or songwriters that haven’t been paid royalties from Spotify it could be hundreds of thousands." Considering Spotify has more than thirty million songs within their category, it's a believable number.
And while Taylor Swift made headlines pulling her last album from Spotify, Lowery is quick to point out the major stars have major labels that handle (read: enforce) their licensing. "It’s likely that the biggest most popular songs are probably with the major publishers and there’s probably some contracts that are covering them…it’s going to be lesser known artists mid-range artists," who aren't seeing any royalties. Without the luxury of a major-label, he says, it's hard for an artist to keep track of what is due them. "Songwriters are songwriters. Their business is writing songs, not auditing royalty statements."
Lowery is probably a lot more astute than other artists about this process, but even he was surprised to discover songs from his last Cracker album found their way to Spotify despite not having been licensed in one of two ways. The first way is negotiating directly with the record labels. For the songs themselves, they (Spotify, et al) can get a license two ways. "They can file what’s called a notice of intention and they automatically get an automatic compulsory license. Or they can come to me directly and try to get a direct license. And (Spotify) did neither of those things. They can get a license for any song as long as they do what section 115 of the copyright act tells them to do. So I was trying to figure out if they had done that and I had somehow missed it."
And after scrutinizing carefully, Lowery came to the conclusion that they didn't exercise a compulsory license or send an notice of intent, or negotiate with him directly. Nor was he an anomaly.
He realized there were many being burned. Even record labels. Like Victory Records, a Chicago-based label home to such bands as Taking Back Sunday and Hawthorne Heights whose catalog was pulled from Spotify over claims the company owes publishing revenue from over 53 million streams. The songs were later reinstated, but not before the damage was done. Lowery kept talking to more artists. "And it just seemed like this was really wide spread and there were a lot of artists and songwriters like me who were in exactly this situation and this is exactly what class action lawsuits are for, to resolve these kinds of situations."
Lowery believes this mess is a byproduct of Silicon Valley's culture where

"...you go out and do something and then try to figure out how to get the permissions and licenses later. They even brag about this. They call it permissionless innovation. I’m sorry, but most Americans, they go to work, they go about their day, and they follow the rules. Why are these guys any different? Why do they get to not follow the rules? That’s just not right."

released a statement:
"We are committed to paying songwriters and publishers every penny," says Spotify global head of communications and public policy Jonathan Prince in a statement. "Unfortunately, especially in the United States, the data necessary to confirm the appropriate rightsholders is often missing, wrong, or incomplete. When rightsholders are not immediately clear, we set aside the royalties we owe until we are able to confirm their identities. We are working closely with the National Music Publishers Association to find the best way to correctly pay the royalties we have set aside and we are investing in the resources and technical expertise to build a comprehensive publishing administration system to solve this problem for good."
And while it is correct to say that Spotify is working wth the National Music Publishers association while also investing the money, the class action lawsuit alleges the company "knowingly, willingly, and unlawfully reproduces and distributes copyrighted works without obtaining the proper mechanical licenses," with the operative words in that sentence being "knowingly" and "willingly."
With Spotify's response above, we reached out to Mr. Lowery to see if he had anything to say beyond the press release, and we spoke as he was on the road somewhere between King City and San Francisco en route to another Cracker/Camper Van Beethoven show.
My first question concerned the number of songwriters who may be missing royalty payments owed to them by Spotify. A class-action lawsuit, by definition means a hundred or more parties. "The class is actually larger than that," he said. "Part of it is you go through the discovery and figure out what it is (and how many are affected). As far as artists or songwriters that haven’t been paid royalties from Spotify it could be hundreds of thousands." Considering Spotify has more than thirty million songs within their category, it's a believable number.
And while Taylor Swift made headlines pulling her last album from Spotify, Lowery is quick to point out the major stars have major labels that handle (read: enforce) their licensing. "It’s likely that the biggest most popular songs are probably with the major publishers and there’s probably some contracts that are covering them…it’s going to be lesser known artists mid-range artists," who aren't seeing any royalties. Without the luxury of a major-label, he says, it's hard for an artist to keep track of what is due them. "Songwriters are songwriters. Their business is writing songs, not auditing royalty statements."
Lowery is probably a lot more astute than other artists about this process, but even he was surprised to discover songs from his last Cracker album found their way to Spotify despite not having been licensed in one of two ways. The first way is negotiating directly with the record labels. For the songs themselves, they (Spotify, et al) can get a license two ways. "They can file what’s called a notice of intention and they automatically get an automatic compulsory license. Or they can come to me directly and try to get a direct license. And (Spotify) did neither of those things. They can get a license for any song as long as they do what section 115 of the copyright act tells them to do. So I was trying to figure out if they had done that and I had somehow missed it."
And after scrutinizing carefully, Lowery came to the conclusion that they didn't exercise a compulsory license or send an notice of intent, or negotiate with him directly. Nor was he an anomaly.
He realized there were many being burned. Even record labels. Like Victory Records, a Chicago-based label home to such bands as Taking Back Sunday and Hawthorne Heights whose catalog was pulled from Spotify over claims the company owes publishing revenue from over 53 million streams. The songs were later reinstated, but not before the damage was done. Lowery kept talking to more artists. "And it just seemed like this was really wide spread and there were a lot of artists and songwriters like me who were in exactly this situation and this is exactly what class action lawsuits are for, to resolve these kinds of situations."
Lowery believes this mess is a byproduct of Silicon Valley's culture where

"...you go out and do something and then try to figure out how to get the permissions and licenses later. They even brag about this. They call it permissionless innovation. I’m sorry, but most Americans, they go to work, they go about their day, and they follow the rules. Why are these guys any different? Why do they get to not follow the rules? That’s just not right."

"David Lowery 02" by Joe Mabel. Licensed under CC BY-SA 3.0 via Wikimedia Commons