Warner & Spotify clash in court over Indian moves

Spotify’s slow and stumbling path into India has hit another rock on the road – it’s been sued by Warner Music Group (WMG) in that country.

It is a blow to Spotify Technology SA as WMG – the third largest major label in the world – holds its access to Ed Sheeran, Cardi B, Bruno Mars and Led Zeppelin, to name just four big sellers.

While Spotify was negotiating a licensing deal with WMG, it was also scheming to use an Indian statutory license which gives performance rights to radio and TV stations to offer songs from Warner’s publishing division.

Saying Spotify “abruptly changed course”, WMG explained, “We had no choice but to ask an Indian court for an injunction to prevent this.”

It added: “It’s our goal to hammer out a deal that works for everyone.

“We hope this is just a speed bump in the expansion of our long and successful global partnership.”

Spotify has reacted with a surprisingly strongly worded statement in which it accuses WMG’s behaviour as “abusive.”

In a statement, the Swede responded:

“Warner Music Group (WMG) instructed Warner/Chappell Music (WCM) to file for an injunction in an attempt to leverage WCM’s local Indian publishing rights, to extract concessions in WMG’s global renewal negotiations for musical recordings.

“WMG revoked a previously agreed upon publishing license for reasons wholly unrelated to Spotify’s launch in India.

“All other major labels and publishers have already agreed on economics and to license their music, and Spotify has also entered into a license with the local collecting society, while WCM remains the lone hold-out needed for a Spotify launch in India.

“WMG’s abusive behavior would harm many non-Warner artists, labels and publishers, and prevent Spotify from competing in the market, leaving us no choice but to file for a statutory license.

“This statutory license, which allows for application to internet-based services, prevents WMG’s abusive practices, while ensuring all rights holders are compensated fairly.

“Under the statutory license, Spotify will pay WCM and their rights holders rates that are in-line with the rates Spotify agreed to pay the leading Indian music entities, ensuring everyone involved will benefit from the new audiences and significant revenue the Indian market will bring.

“We will continue to assess our options at this stage.”

The Indian music industry is also nervous that Spotify could successfully grab rights for streaming services meant for TV and radio.

India is a huge untapped market for western music companies.

Helped by the growth of high-speed internet, music sales jumped 17% to $130.7 million in 2017.

Over 4 million of Spotify global users listen to Indian music on its platform.

It was supposed to launch in India in late January.

It is still negotiating with Universal and  Sony while stitching up deals with large Indian companies.