Spotify says it OVERPAID artists, and wants the money back
Spotify finds a new way to screw artists
Spotify's poor royalty payouts have been a heavily debated topic in recent years. The streaming giant has only made incremental progress in absolving their artist underpayment. Earlier this year they reversed course, Spotify, along with other streaming services, sued artists to prevent an increase in royalty payments. Now it seems they're just going to throw it all out the window according to a new report from Music Business Worldwide.
The article suggests that there was a mistake regarding Spotify's family plan, where multiple family members can all use one account. The MBW post details that there was "some additional and under-reported complexity to the CRB (Copyright Royalty Board) decision concerning Spotify’s student discount offers and its family plan bundles – which allow up to six family members to stream Premium Spotify for a single price of just $14.99 a month". A Spotify spokesperson concluded that from this, they in fact "overpaid" artists and are now looking at recouping that lost income;
"according to the new CRB regulations, we overpaid most publishers in 2018… rather than collect the 2018 overpayment immediately, we have offered to extend the recoupment period through the end of 2019."
This recoupment will translate to Spotify treating it as an "advance" for publishers in 2019, meaning their 2019 royalties will most likely be significantly less due to the previous year's overpayment stated above.
Our best guess is that for the majority of artists on Spotify, whose streaming numbers don't quite equate to Taylor Swift numbers, that sweet three-figure royalty check at year's end will probably be down to an easy-to-manage two-figure sum.
What is an artist to do in this day and age? Probably not PledgeMusic either.
(We have always been partial to Bandcamp)