In a recent blogpost published by Spotify, the company seems ready to retool their current royalty system for one that is a bit more suitable for a music streaming service.
To that end, Spotify has announced that it will be investing resources and technical expertise to build a comprehensive publishing administration system to solve the royalty problem.
Currently, the royalty system implemented by Spotify, and indeed many other music streaming services, is lifted from the traditional retail system, making it ill-suited for use by music streaming services. According to Spotify, the music industry licensing and copyright structures are highly complex, changing from country to country and agreement to agreement. The main challenge faced by Spotify is the lack of accurate data to identify who owns the rights to a specific track.
Spotify intends to fix their royalty system, but warns that to do so requires significant time and effort. In short, the system won’t be rolled out anytime soon. In the meantime, the company is working closely with the National Music Publishers Association (NMPA) and various other individuals in the music industry to find the best way to correctly pay royalties.
Source : Spotify
