The organisation has threatened to sue Spotify for not paying artist royalties well enough stating that while investors benefits immensely, artists are not compensated well. This case raises further issues regarding the manner in which these streaming platforms compensate artists by passing out royalties.
ASCAP’s legal battle against Spotify states that the digital streaming giant has been holding back on royalties; consequently, depriving many artists, songwriters, and composers their due. It also claims that the specific payment model that Spotify uses is quite unclear and the company does not compensate the performers adequately for the contributions that allow the platform to generate billions of money.
Launched 10 years back, Spotify is one of the most famous music streaming platforms in the world that uses the pro-rata payment policy for its users. This entails that for every subscription made and every money earned from advertisements, they are combined and the artists are then paid by proportional numbers of streams. This has also been a usual concern that this system only profits the artists whose songs are being played numerous times, leaving the up-and-coming artists, independent artists to barely get anything.
The following litigations show that ASCAP’s legal action is not the only one of its kind that exists in the market. It also chimes with resentment found across the entire industry where the musicians are convinced that their earnings have reduced due to increased use of technology. As seen from the booming streaming services, the reach and discovery opportunities have expanded worldwide, but the financial recompense for the majority of musicians is still wanting.
In order to address these concerns Spotify has not remained quite silent, the company has contended that it has paid out billions for royalties and that it is constantly trying to formulate better payment systems. Nevertheless, the lawsuit indicates that a greater degree of openness should be pursued and that distribution principles should be less biased.