Music to Your Ears? A Breakdown of Music Streaming Litigation

If you’ve been keeping up with class action and music news, you’ve probably heard all about the lawsuits that recently hit the biggest names in music streaming. From Spotify to Tidal to Rhapsody, the gang’s all here. But, why are they here? I’m assuming that’s what you’d like to know since you’re reading this, so let’s jump right into it.

Who’s Being Sued?

Each of these six streaming services has been hit with a separate lawsuit:

Who’s Suing Them?

Most of the lawsuits are coming from one of two sources, either from David Lowery (lead singer and guitarist for the bands Camper Van Beethoven and Cracker) or from John Emanuele (from The American Dollar) and the band’s publishing company Yesh Music.

Lowery filed against Spotify and Rhapsody, while Emanuele and Yesh Music filed against Microsoft, Google, Tidal and Slacker.

Spotify was hit with a second, similar lawsuit by singer-songwriter Melissa Ferrick in January.

Why Are They Being Sued?

All of the defendants have been accused of copyright infringement. Specifically, the complaints say that the streaming services failed to secure the mechanical licenses (the rights to the reproduction, distribution or sale of a musical composition) for both the plaintiffs’ and other musicians’ work. The lawsuits also claim that the streaming services were unjustly enriched (made money at the expense of someone else) when they streamed music from various artists without paying them the proper royalties first.

And How’s That Working Out For Everyone?

Well, two of the services already settled. Spotify agreed to pay more than $20 million and worked out a deal with the National Music Publishers Association that will let independent music publishers claim royalties for their songs. Microsoft is the other service provider that reached a settlement, but the terms of the deal haven’t been made public knowledge.

This could prove to be mere speculation, but we expect the four other streamers to quickly follow suit, pun very much intended. Each of the streaming services is facing lawsuits making almost identical accusations and, if Spotify and Microsoft were ready to give up without a real fight (more or less), we wouldn’t be surprised if the other suits saw similar resolutions.

Is This Like What Happened with Napster?

It’s definitely similar, but it isn’t identical. For those of you don’t remember Napster, it was a free file-sharing service that a bunch of college students used to share music files between 1999 and 2001. The site quickly gained popularity and became the “go-to” location for students looking to download mp3s. It was a free file-sharing website so, naturally, the music industry wasn’t happy about its success.

There was a good amount of talk about how Napster “facilitated piracy” and was “the single most insidious website” Ron Stone (he manages musicians, he’s kind of a big deal) had ever seen. It was with his counsel that the Recording Industry Association of America launched the first lawsuit against Napster in December of 1999. Things got really interesting when Metallica joined the fray.

Metallica decided to sue Napster, much like the bands who filed suit against today’s streaming services. But, the difference is that you’ve probably heard of Metallica. They’re a big-name band that has been around as long as MTV has been a thing – Ronald Reagan was also sworn into office the year the band formed (1981).

With a new way to get their hands on music (and for free, at that), the public wasn’t thrilled about the lawsuit. They thought the band was just doing it for the money (at this point, they had been fairly successful for nearly 20 years, so they were pretty well off). It didn’t help their public image when they tracked down more than 335,000 usernames of people who downloaded their songs illegally (some people would call them fans) and had Napster block them from their site. The lawsuit became a huge black spot on Metallica’s legacy as far as its fans were concerned.

It isn’t likely that the bands suing Spotify and Tidal will have that big of a reaction – and they certainly haven’t yet. The American Dollar, Cracker and Camper Van Beethoven aren’t household names. They are lesser known, independent artists – but that doesn’t mean that they don’t have the power to change how these streaming services add music to their collections.

Now, Napster was forced to shut down its services until it could implement a system that would ensure that artists and publishers got paid. That never ended up happening. Napster filed for bankruptcy and liquidated its assets in 2002.

Times have changed since Napster first formed, got sued and went bankrupt. Spotify and the rest are considered the “new” way of listening to music and are already used by millions of paying customers around the world. It’s unlikely that a couple fairly straightforward lawsuits will send these titans down the same road Napster was forced to tread. Enough time has passed that, although they are similar, Napster shouldn’t be the example for these cases. We’re probably safer expecting the rest of the services to follow the lead of Microsoft and Spotify, with a settlement that lets everyone forget about it and put on their favorite tunes.