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Spotify Settlement Inadequate for Publisher Seeking $1.6 Billion

Lucas Shaw
An attendee tries out Spotify Ltd.'s music streaming service, operated by Spotify Japan K.K., on a laptop computer during a launch event in Tokyo, Japan, on Thursday, Sept. 29, 2016. Spotify Ltd. is bringing its popular online music service to Japan, a large and lucrative market where fans have demonstrated a continuing fondness for CDs and even vinyl records. Photographer: Akio Kon/Bloomberg

Spotify’s $43 million settlement with songwriters is being challenged in a new lawsuit from a publisher who says artists like Tom Petty and Neil Young deserve a lot more -- $1.6 billion more.

Wixen Music Publishing Inc. claimed in a lawsuit filed Dec. 29 that Spotify has infringed upon copyrights to 10,784 songs it administers, and is seeking $150,000 in statutory damages for each song. Spotify declined to comment.

Spotify, owner of the world’s largest paid music service, settled a case with songwriters last year, a bid to end years of fighting ahead of its planned listing on the New York Stock Exchange. Many of the songwriters and their representatives, including Wixen, were unhappy with the settlement and have subsequently filed objections.

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Streaming services need to acquire licenses from the individual or group that recorded the song -- often held by a record label -- as well as the songwriters, whose rights are usually administered by a publisher. While Spotify had licensing deals with the biggest publishers, the lawsuit it settled last year involved smaller companies like Wixen that claimed they hadn’t granted rights to the streaming-music provider.

Songwriters are also in the process of trying to persuade federal judges to adopt a new standard for how streaming services pay them.

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