The Spotify “fake artist” scandal that broke last week has been a real head scratcher. Did they really save that much money? I mean they paid billions out to rights holders, but NYTimes puts the “savings” on fake songs at $3 million dollars? Was it worth it? Especially considering the public relations damage it does to the brand.
Certainly the most likely explanation is that this is just a bonehead move, a crony favor for a fellow Swedish music tech company that appears to represent most of these songs.
But we should consider two alternate theories:
The lower songwriter royalties paid on these tracks may end up as evidence of “free market” rates before the Copyright Royalty Board that sets rates for songwriters. Yes,songwriter royalty rates in US are not just set, they are capped by the US government! The CRB is bound to consider free market rates. If they…
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