Spotify has struck a deal that makes it easier for music publishers to claim royalties they are owed, if they agree not to make copyright-infringement claims against the streaming service.
The agreement with the National Music Publishers Association (NMPA) comes three months after Spotify was hit with two lawsuits seeking class-action status over alleged copyright infringement.
The first was filed by musician David Lowery, singer of the bands Cracker and Camper Van Beethoven, and an outspoken critic of streaming services’ business practices. It sought $150 million in damages. Another singer, Melissa Ferrick, filed the second, seeking $200 million. Both lawsuits were filed in U.S. District Court in Los Angeles, seeking class-action status; a judge is due to rule soon on whether to combine them.
Spotify and the music publishers has now committed to building a database to match streamed songs to their writers more consistently.
Under the agreement, Spotify will send a royalty check for all songs it cannot match back to the group of publishers – but only those that take part in the deal.
The joint statement did not specify how the money would be divided among the publishers.
“As we have said many times, we have always been committed to paying songwriters and publishers every penny,” Spotify spokesman Jonathan Prince said in the statement.
The NMPA said that Spotify had agreed to establish a “large bonus compensation fund” for unmatched royalties.
The group added: “Not only does today’s groundbreaking agreement distribute royalties to writers, it also improves processes for identifying and compensating writers for their work and establishes a better database for future payments. The deal will allow copyright owners to identify their works and receive the money Spotify has set aside for the past usage of unmatched works.”
The private company, which is estimated to be worth more than $8 billion (£5,6bn), says it has paid back more than $3 billion (£2.1bn) in royalties since its launch in 2008.
Critics, notably pop superstar Taylor Swift, disapprove of Spotify’s advertising-backed free tier through which three-quarters of its more than 75 million users listen without paying.
Spotify voiced confidence that the deal would benefit the entire industry as identification problems are not unique to them.