Conflicting Emotions For Spotify
• It’s certainly been a weird week or so for Spotify — an IPO and a lawsuit! By now you know that last Friday, the Stockholm, Sweden-based streaming giant was hit with a massive $1.6 billion copyright lawsuit from Wixen Music Publishing, alleging that Spotify is using songs from Tom Petty, Stevie Nicks, Neil Young, Zach De La Rocha and Tom Morello of Rage Against the Machine, The Black Keys’ Dan Auerbach, Steely Dan’s Donald Fagen, Weezer’s Rivers Cuomo, the late David Cassidy and many more without a license and compensation. The plaintiff is seeking a damages award worth at least $1.6 billion plus injunctive relief. The complaint, as seen in The Hollywood Reporter, alleges that as much as 21 percent of the 30 million songs streaming on Spotify are unlicensed. As the complaint states, “Spotify brazenly disregards United States Copyright law and has committed willful, ongoing copyright infringement.”
The IPO news, as first reported by Axios, said Spotify had confidentially filed the paperwork for an initial public offering with the Securities and Exchange Commission in late December. Spotify is expected to pursue a direct listing on the New York Stock Exchange, meaning that it wouldn’t hold a traditional road show to court investors to underwrite the sale. The Wall Street Journal reported in December that the company was expected to get SEC approval to go through with that process.
As Axios says, the 11-year-old Spotify, run by Founder and CEO Daniel Ek, has over 140 million users and more than 60 million paying subscribers, making it larger than rival Apple Music. Spotify has raised over $2.7 billion and counts Goldman Sachs, TCV and Accel Partners as some of its investors. Reports peg its valuation at around $20 billion.
