Stop Me Before I Infringe Again: Is Spotify Blaming HFA for Its Black Box?

If you read the recent Wall Street Journal story (“Songwriters Lose Out on Royalties“) about the unpaid and underpaid songwriter royalties digital services, especially at Spotify, you might have noticed an inconsistency.  Here’s where it starts:

“We want to pay every [fraction of a] penny, but we need to know who [sic] to pay,” Spotify spokesman Jonathan Prince said in an email. “The industry needs to come together and develop an approach to publishing rights based on transparency and accountability.” Spotify says it has paid over $3 billion to rights holders since it launched in 2008….“The problem isn’t that they’re not setting aside the money, or that they don’t want to pay the money,” says Mr. Price. “The problem is they don’t know who wrote the song, or how to find the person to pay them.”

This “blame the victim” mentality at the digital services is a bit hard to take, particularly in Spotify’s case.  It would be one thing if Spotify did not use songs because they couldn’t license them.  It’s another thing altogether for Spotify to use the songs without paying and then blame the songwriter for being “too hard” for Spotify to find.  It’s a bit like the parenticidal child who complains of being an orphan.  Simple fix:  If you can’t find the songwriter, don’t use the song.  That’s not the answer they want to hear, of course.

But it’s not like they have no help.  According to a July 18, 2011 press release, the venerable Harry Fox Agency handles all of Spotify’s publishing administration:

The Harry Fox Agency, Inc. (HFA), the nation’s leading provider of rights management, licensing, and royalty services for the music industry, announced today that it has entered into a publishing licensing, administration and management agreement with Spotify, the award-winning music service that has taken Europe by storm. HFA will clear mechanical publishing rights for Spotify, licensing certain rights in millions of musical works from thousands of publishers.

Under the agreement, Spotify will utilize HFA’s end-to-end publishing licensing, reporting, and royalty services to support their launch in the U.S. By collaborating with HFA, Spotify joins the ranks of many major and independent labels, digital music distributors, and music services that rely on HFA for their mechanical publishing licensing and administration needs. HFA has more than 46,000 affiliated publishers – the only music company in the U.S. to boast such deep reaching relationships. Coupled with innovative state-of-the-art technology and the industry’s most comprehensive database, HFA is uniquely qualified to provide these services to Spotify.

As I read Spotify’s “blame the victim” defense, the company seems to be blaming the Harry Fox Agency for what appears to be Spotify’s vast unlicensed black box.  Here’s the problem–HFA no doubt informs Spotify of which songs are and are not properly licensed.  At some point, Spotify chooses to exploit unlicensed songs anyway.  That’s why there’s a black box at Spotify.  It is really unfair for Jonathan Prince to try to triangulate his way into deflecting blame from Spotify onto HFA and to try to pretend that the HFA data resources are somehow not transparent or accurate.

This is particularly insulting given the recent acquisition of HFA by SESAC which makes SESAC’s vast resources, data systems and deep pocket Big Tech private equity backing presumably available to HFA.

But however you look at it, if Spotify decides to exploit songs without a license or without properly complying with legal requirements, that’s not HFA’s fault and it’s really not fair for Spotify to try to blame either the victim or HFA.