Spotify sued by Wixen, publisher for Tom Petty and Stevie Nicks, for $1.6 billion
Spotify is at a precipice between going for an initial public offering and profitability for the first time in its existence. As the most popular music streaming platform, it stands out as a big target for publishers trying to get something more out of their contracts.
It appears that Wixen Music Publishing may be trying to exercise leverage now as VARIETY reports that it has sued the Swedish distributor for $1.6 billion in damages and injunctive relief for failing to properly license thousands of songs it has in its database. Wixen represents Donald Fagen of Steely Dan, Rivers Cuomo of Weezer, Steve Nicks, Tom Petty, Neil Young and others.
Spotify had pushed a settlement worth $43 million in May, but Wixen stated in its suit that the proposal undervalued the work of its clients and that these licenses were incomplete in the scope of media it covered — the plaintiff claims that as he streaming company rushed to negotiate with publishers back when it launched in the United States that it “did not possess the infrastructure to obtain the required mechanical licenses and Spotify knew it lacked these licenses.”
The publisher’s president Randall Wixen said that the company and its clients were not participating in a class-action lawsuit or supporting legislation called the Music Modernization Act in Congress because it wants to ultimately work with Spotify for a better settlement.
Spotify has had continuing troubles with publishers over contract terms and compensation since its inception in 2008. Since then, it has expanded to dozens of markets with more mature negotiating mechanisms with new clients. That doesn’t mean that old clients aren’t interested in getting back at Spotify.