Spotify Wants a Refund On Overpaid Royalties To US Songwriters, Report Says

Spotify is reportedly seeking a refund for overpayments made to songwriters and publishers last year, according to a report from Music Business Worldwide. CNET reports: Last year, a royalty rate-setting panel in the U.S., called the Copyright Royalty Board, ruled that a particular kind of royalty paid to songwriters and publishers should rise 44% or more for 2018 through 2022. The board finalized that rate — called a mechanical royalty — earlier this year. Then streaming services like Spotify, Amazon, Google and Pandora appealed the payment increases in March. Now Spotify is saying it paid too much last year and wants a refund, according to Music Business Worldwide.

The CRB rules say the annual streaming royalty rate for US songwriters and publishers between 2018 and 2022 should be set by choosing the highest outcome of three different models, with one model based on a flat fee per subscriber, Consequence of Sound noted. But Spotify’s student discount and family plan bundles add a layer of complexity. The Copyright Royalty Board’s rules say a family plan is be worth 1.5 subscribers per month and a student plan is equal to half a subscriber per month. The family plan lets six people subscribe for $15 a month, while students pay $5 a month. (A regular subscriber pays $10.) The argument by Spotify seems to be that it didn’t take some subscribers into account and overpaid publishers. It’s not seeking the 2018 money back immediately, but “offered to extend the recoupment period” until the end of 2019, according to Music Business Worldwide.

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