The Swedish streaming music giant must contend with a lawsuit from the American company Wixen Music Publishing which is suing it for copyright infringement, specifically alleging Spotify is using thousands of its songs without a proper licence and compensation to the music publisher.
Spotify, the company which offers unlimited music streaming on subscription, is accused of failing to pay fair royalties to the right-holders of Wixen Music Publishing which manages the rights of 10,784 songs of artists such as Tom Petty, the Doors, Carlos Santana and Neil Young.
The music publishing company is seeking a damages award from Spotify for lump-sum compensation worth $ 150,000 per song, for a total of more than $ 1,6 billion.
Spotify is not new to this kind of legal action as in May 2017, after a drawn-out lawsuit, the Stockholm based company had already reached an agreement to settle a class action lawsuit led by the singer-songwriters David Lowery and Melissa Ferrick, to pay the authors $ 43 million in rights in view of the listing of their shares on the New York Stock Exchange (NYSE) expected for this year. In July 2016, songwriter Bob Gaudio and music publisher Bluewater Music Services in Nashville, took legal action filing lawsuits for the same reasons.
Meanwhile Spotify has filed documentation for DPO (direct public offering), namely direct listing of its shares on the New York Stock Exchange, to the Securities and Exchange Commission (SEC) which should take place by the first trimester of the year. Spotify, the clear worldwide-leader in music streaming, recently revealed that it had over 70 million paying subscribers. Its value was estimated at $8,5 billion last year, but it seems that the company’s value has risen to $20 billion after a recent equity shares swap with the Chinese social media giant Tencent Music Entertainment.