While Spotify went ahead and launched in India just this past Thursday, its legal battle with Warner Music Group (WMG) is far from over. WMG is suing Spotify over music licensing rights in India, after revoking a previously agreed upon license (for reasons unrelated to Spotify’s launch in India, according to Spotify).
WMG filed an injunction against Spotify in a Mumbai court on February 25th, seeking to prevent Spotify from using any music from WMG’s catalogue of artists. Spotify now seeks a statutory license, a bit of unique copyright law in India.
Spotify – The Anti-Piracy Pirates?
What’s actually kind of hilarious about this situation is that Spotify was originally launched as a way to combat music piracy, with the support of WMG, Universal Music, Sony, BMG, EMI, and several other record labels. So a streaming music service that was literally founded on anti-piracy principles is basically trying to pseudo-pirate WMG’s catalogue!
Basically, because WMG owns so many songs, Spotify said they could not feasibly launch in India without an agreement with WMG. Thus, Spotify is turning to a copyright law in India, where “broadcasters” (this is an important term) can obtain a license for copyrighted works, even without the copyright holder’s permission.
This is where it starts to get a little messy – WMG fired back, saying that a statutory license only applies to traditional television and radio broadcasters – not an online streaming service. Thus, the injunction WMG filed against Spotify is basically asking the Mumbai court to block Spotify’s application for a statutory license.
The very day after WMG filed their injunction, the Bombay High Court basically sent both Spotify and WMG back to their rooms for a time-out. The court decided that Spotify must pause their application for a statutory license, while simultaneously deferring WMG’s injunction.
The court also ruled that if Spotify goes ahead and launches in India, Spotify must maintain an audit of all uses of WMG’s music, and deposit any revenues to the court. Basically, holding Spotify’s revenue (from WMG licensed music) in a kind of escrow, until the court decides what to do.
Does Spotify Really Need WMG in India?
Spotify of course may be slightly exaggerating their case, with the idea that no WMG music would significantly hurt Spotify’s presence in India. A quick look at top music billboard charts in India shows mostly local artists, with a few sprinkles of global hits. In fact, “filmi” music (songs from popular Bollywood films) accounts for 72% of music sales in India.
So while Spotify is “worried” about possibly losing the right to stream artists like Ed Sheeran, Coldplay, Linkin Park, and other popular WMG artists to the Indian market…they probably shouldn’t be (too much).
What Spotify needs to actually worry about are the established local music streaming services, like Gaana, which already has over 80 million users. Gaana serves primarily Indian music, in 16 regional languages, at Rs. 129 per month for the highest tier plan (unlimited streaming, no ads, no data usage for the first 500 songs).
So of course, being able to stream WMG music to the Indian market would be useful to Spotify, to make them unique and set them apart from the local streaming services. But even without, those same local services have proven you don’t need international music to attract huge amounts of subscribers in India.
In a nutshell, Spotify needs WMG’s artists to be competitive with the already large streaming services available in India. They may have been somewhat correct about it being difficult to be competitive in India without WMG’s agreement – however, considering that Spotify went ahead and launched anyway, and are awaiting decision from Mumbai court on the statutory license application, this is probably a good time for Spotify to test the waters with what music they can offer.
Note: This article reflects only the opinions of the author, and not Appuals as an entity.