Spotify is working on a system to compensate artists more fairly

Industry sources say that Spotify currently owes publishers and songwriters about $25 million for music played on its U.S. service. A source close to Spotify puts that number closer to $17 million. Against a backdrop of controversy over interactive music services not properly licensing songs or paying publishing royalties to music publishers and songwriters, Spotify’s global head of publisher relations James Duffett-Smith has posted a blog on the service’s website, writing that the company “will invest in the resources and technical expertise to build a comprehensive publishing administration system to solve this problem.” According to sources, Spotify will work in conjunction with the National Music Publishers’ Assn. and other publisher organizations around the globe to build a music publishing database that, when completed, will properly manage licenses and publishing royalties distributions going forward. While some applaud the move, saying non-payment and compliance is a mess that can and should be fixed, others say it’s something the company should have prioritized from the start — instead of chasing a billion-dollar-plus valuation at the expense of proper payments to publishers.