Spotify is attempting to obtain refunds from publishers after belatedly discovering that it had overpaid royalties through 2018 to an undisclosed extent. This will not be news to their ears however, Spotify's streaming rates are often criticised as being too low.
The music streaming provider, in common with other publishers, is bound by the US Copyright Royalty Board to reimburse content creators for its use of their work but a recalculation of these fees last year appears to show that Spotify has been overpaying.
A spokesperson said: “According to the new CRB regulations, we overpaid most publishers in 2018. While the appeal of the CRB decision is pending, the rates set by the CRB are current law, and we will abide by them — not only for 2018, but also for future years in which the amount paid to publishers is set to increase significantly.
“Rather than collect the 2018 overpayment immediately, we have offered to extend the recoupment period through the end of 2019 in order to minimize the impact of the adjustment on publishing companies.”
The decision is likely to further sour relations between the service and the artists it relies on, which were already at a low ebb following a botched move to ban R.Kelly from its playlists with a ban on hateful content and conduct.
Spotify has struggled to put itself in the black, prompting it to diversify into podcasts.