Update: Spotify Owes Victory Records $23,000 in Unpaid Royalties

Yesterday we reported that all of the Victory Records catalogue had been pulled from Spotify. We know, we know, MetalSucks readers aren’t exactly aching to stream those old Taking Back Sunday and Hawthorne Heights albums, but 1) Victory’s had plenty of great artists over the years, and 2) stories like this one are always fun to follow, especially when Spotify is involved.

The details surrounding the spat were murky — especially given Victory’s controversial past, and that we only ever heard their side of the story here — and all we got was a simple explanation that Spotify were “not properly paying publishing revenues,” which was super vague and could’ve meant any number of things.

But now a more detailed explanation has come to light via Billboard.

The short version: Audiam, a company Victory hired to track down unpaid publishing royalties, found a whole bunch of said unpaid royalties which Spotify did not pay even when confronted with the issue.

The long version:

[Victory] hired Audiam — a digital distribution and monitoring company founded in 2014 by former TuneCore CEO Jeff Price, which looks to help songwriters and publishers ensure they receive proper payments from digital services — to monitor payments from streaming services to make sure its publishing company, Another Victory, gets paid correctly.

Audiam “created unique technology indexing and cataloging every digitally, commercially released sound recording,” Price claims. “It then finds every commercially released sound recording of a particular song available in the streaming digital services.” For example, Audiam identified 803 sound recordings of the Bob Dylan song “All Along The Watchtower.”

In addition to building technology to help match songs to master recordings Audiam, where it can, takes master recording performance royalties statements and matches them against mechanical royalty statements from the digital services, contrasting the results in order to determine which songs are not receiving payments.

Using Spotify’s royalty statements on Victory Records’ master recordings, and comparing those statements from 2012 through September 2015 against publishing royalty statements made to Another Victory over the same period, Audiam found that, of the 3,245 recordings that Another Victory holds a stake in, only 1,062 had received payment from Spotify. That leaves 2,183 songs in which Another Victory has a publishing stake but that did not receive mechanical royalty payments, accounting for 53 million total streams for those songs.

Billboard estimates that, at a blended mechanical rate for the ad-supported and premium services of $0.00043 per stream, the amount left unpaid comes to nearly $23,000.

So why was Spotify the party to pull the tracks down, and not Victory? Some speculate that Spotify could have become nervous over possible litigation, while other think they were just trying to end the flow of payments owed before the problem got worse.

The Billboard article goes on to explain the tiff in more detail, including the revelation that as much as 25% of all publishing royalties — not just for Victory — could be going unpaid. Read the full report here.

[via Lambgoat]