Music streaming services are almost guaranteed to run into some issuing with royalties paid to artists. Spotify is looking to make this streamlined so that it can avoid such issues and get the music out.
Spotify’s answer is to hold on to royalties from songs played on its service until rightsholders are confirmed. It’s not the most groundbreaking of approaches, but it works for Spotify as it allows for the service to keep tunes that might bring them trouble legally available to users while also keeping it out of hot water with publishers who will need to confirm that they are in fact the rightholders.
Copyright law when it comes to music can be a messy thing when it comes to dealing with streaming services. As evidenced recently by Aurous’ closing up operations and SoundCloud’s recent agreement with PRS for Music, there are layers to copyright law and is far reaching regardless of country. The nature of Spotify makes it even more difficult as it’s a streaming service and not a physical radio station that is definitely bound by copyright law by location.
“Music industry licensing and copyright structures are legendary in their complexity—and they change from country to country and agreement to agreement,” the company noted in its blog. It’s these complexities that can cause issues in getting music released or prevent music from being released.