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Spotify launches in India, but legal spat with Warner continues

By | Published on Wednesday 27 February 2019

Spotify

Spotify has finally launched in India. At last! At least, if nothing else, that means all the endless “I wonder when Spotify is going to launch in India?” chatter and all that “Spotify is going to launch in India this week!” speculation can come to an end. And thank fuck for that. I hate wondering and speculation.

Hey, I wonder when Spotify is going to launch in Africa! Later this year maybe? Actually, both me and a room full of great Tanzanian artists would really like to know the answer to that question. Could we have it by lunchtime maybe?

But yes, India. And Spotify in India. “With today’s launch in the world’s second most populous country”, says the streaming firm, “Spotify is making its way to the fastest growing market globally for mobile apps”. Not only that, the statement brags on: “Spotify comes to India offering the best listening experience in local and international music, with the Spotify app available to download for free or with an upgrade to Spotify Premium for only INR 119 per month”.

That monthly subscription equates to about £1.25 and is similar to the price charged by other streaming services already live in the Indian market. Student discounts and daily and weekly subscriptions are also available, again in line with other services in the country.

There has been much discussion in the last year, of course, about what the right price point is for streaming in any one country, with global rights owners expressing concerns that, with emerging markets accounting for an increasing number of overall subscribers, the global average revenue per user is falling.

Avoiding that tricky topic of conversation, Spotify boss Daniel Ek hailed his company’s long-waited Indian launch by saying: “As Spotify grows, our goal is to bring millions of artists and billions of fans together from every country and background. India has an incredibly rich music culture and to best serve this market, we’re launching a custom-built experience. Not only will Spotify bring Indian artists to the world, we’ll also bring the world’s music to fans across India. Spotify’s music family just got a whole lot bigger”.

Ah yes, the world’s music streaming away in India. But what, you might be thinking, about those Anglo-American songs published by Warner/Chappell? Are they streaming?

Warner, of course, pre-empted Spotify’s big Indian launch by marching to a court in Mumbai on Monday seeking an injunction that would confirm that Spotify cannot rely on a statutory licence for the Warner/Chappell songs catalogue in the country.

The mini-major had told Spotify at the last minute that it couldn’t, in fact, have a licence for India covering those Warner-published songs that it licenses directly for streaming. Spotify then accused Warner of refusing that licence late in the day as leverage in global deal negotiations that have nothing to do with its Indian launch.

Warner refusing a licence for its songs catalogue creates problems for Spotify because it will impact on any recordings from other labels that contain Warner/Chappell songs and also plenty of songs that are co-owned by other publishers with which the streaming service has a licence. Spotify itself pointed out that Warner could control just 1% of a song and, by refusing a licence, recordings of that song technically couldn’t stream.

On top of that, there is the issue that Spotify doesn’t usually know what songs it is actually streaming, the labels and distributors uploading tracks but providing no precise information on what song any one recording contains. Therefore, Warner withholding its songs catalogue was arguably more problematic than it refusing to allow its recordings to be streamed.

In an attempt to counter this sneaky manoeuvre on the major’s part, Spotify decreed that it reckoned it could, if necessary, rely on a statutory licence for Warner’s songs in India.

Statutory or compulsory licences are where copyright law forces a rights owner to license their music at standard rates. Indian copyright law has statutory licences for the mechanical copying of songs and for broadcast – the latter of which was extended to cover online broadcasting. But the question is: should that apply to a Spotify type service?

Warner argued not, hence the legal action. The major wanted an injunction confirming that statutory licences in India did not apply to on-demand streaming services. But, having received Warner’s legal papers on Monday, the court declined to issue an immediate order to the effect that Spotify was banned from streaming Warner-published music. However, the legal action will continue, with Spotify ordered to account and pay to the court any royalties due to Warner/Chappell until the matter is resolved, one way or another.

It was a ruling that allowed both sides to claim partial victory. Spotify said in a statement yesterday: “We’re pleased with today’s outcome. It ensures songwriters, artists, labels and publishers will benefit from the financial opportunity of the Indian market and that consumers will enjoy an excellent Spotify experience. As we’ve said all along, we’re hopeful for a negotiated solution with Warner based on market rates”.

Warner then responded: “We welcome the court’s decision to direct Spotify to deposit monies with the court and to maintain complete records of any use of our music as well as all advertising and subscription revenue earned by Spotify. These are positive steps to protect our songwriters’ interests”.

Providing more details on what the court in Mumbai had actually said, the major’s statement then continued: “We’re also pleased that Spotify cannot pursue proceedings for their claim to a statutory licence before the Intellectual Property Appellate Board for a period of four weeks. Our copyright infringement case will continue on an expedited basis”.

So, the legal spat continues to go through the motions as tracks start to stream via the Spotify platform in India. And while both sides continue to insist that they desperately want to reach a voluntary licensing deal for the Warner/Chappell catalogue in India, Spotify and Warner have nevertheless been issuing blunt statements as this dispute has gone public. Warner has taken particular issue with Spotify’s claims that it had acted in an improper way.

“Spotify’s comments yesterday about our fair market negotiations were appalling to us”, Warner added in its statement yesterday. “We’re shocked that they would exploit the valuable rights of songwriters without a licence”.

Actually, in the early days of digital music it was quite common for services to go live without all their song licences in place, partly because of the complexity of song licensing, and partly because label deals were generally prioritised because it was those that got the platforms the content they needed. Although, it has to be said, the “I’m sure it will be fine in the end” approach didn’t work out all that well for Spotify in the US.

It will be interesting to see how quickly this particular stand-off can be resolved and whether the tough talking on both sides continues.

It will also be interesting to see what Warner-published writers think about the squabble. When publishers negotiate direct deals with streaming services, those deals only generally cover Anglo-American repertoire and – outside the US – they bundle in performing rights that actually belong to each songwriter’s collecting society, rather than the publisher directly.

If, as Spotify claims, Warner has refused to license its songs in India in order to score leverage in wider deal making on a global basis, some songwriters might not be too pleased. Especially if the catalogue involved in the dispute includes performing rights that Warner is merely repping on behalf of the likes of collecting societies PRS, IMRO and APRA.

So, while all chatter about when Spotify will finally launch in India must now end, there will likely be plenty of ongoing chatter about the issues that occurred around the Indian launch.



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