Spotify agrees £84m settlement with songwriters over unpaid royalties
Spotify has agreed to pay $112million, an amount that equates to £84m, in a settlement deal over allegations that songwriters were not paid enough royalties for their work.
It was agreed in May last year following combined lawsuits from songwriter Melissa Ferrick and musician David Lowery and Spotify have been working on arranging a payment process.
While Spotify declined to comment on the situation, The Hollywood Reporter claim that the music streaming service will pay £43.5m in cash while the rest will go towards the existing payment of royalties.
Spotify recently listed on the New York Stock Exchange and valued at an eye-watering $20billion despite having had issues turning a profit in years gone by.
According to the company’s filing with the SEC, Spotify shares traded for as high as $132.50 on private markets and has said the the maximum public offering could be up to $1bn (£725m). The Swedish company, which has amassed 71m paying subscribers, is aiming to “unlock the potential of human creativity by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by these creators.”
“We are transforming the music industry by allowing Users to move from a ‘transaction-based’ experience of buying and owning music to an ‘access-based’ model which allows Users to stream music on demand,” the filing said.
In a vastly crowded area of online music streaming sites, Spotify continues to dominate. According to its filing, the company holds a 41 per cent global market share and has been valued in excess of $23 billion.