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Spotify opposes the broadcast rights of its vast music catalog in India with Warner's editorial arm. This includes all tracks on Warner's songwriter list, totaling more than one million compositions. But, although this niche seems to be limited to India, it is actually an indicator of a much bigger fight ahead.
This year, Spotify is likely to renegotiate its global licensing agreements with the three major US labels, Warner, Sony, and UMG. These agreements include clauses ranging from the advance to income splitting and the most-favored-nation clause, which allows for the modification of important aspects of the contract if another label receives a better offer. Spotify needs these chords to be able to broadcast the large bands of music controlled by these labels.
With these negotiations on the horizon, Warner and Spotify use the launch of the streaming service in India to try to pull each other's concessions. later on the line. Spotify's CFO Barry McCarthy admitted in an interview this week. "It does not really concern India," McCarthy said at a conference at Morgan Stanley. "This is the leverage and renegotiation of the global deal."
The drama began earlier this week, when Warner" revoked a previously agreed publishing license "for India, according to Spotify," for reasons totally unrelated to the launch of Spotify in India. " do not cover extensions in new territories, so when Spotify enters a country like India, it has to make a separate deal.When Warner withdraws, Spotify has attempted to circumvent a direct deal with the label using a controversial amendment to the Indian Act, according to which "broadcasters" may obtain a license for copyrighted works even if the copyright owner refuses to use them.In response, Warner retaliated by asking an injunction, forcing the case to the Indian judicial system
As McCarthy said, "We are fighting for food with Warner, a lot of drama. "
Warner is upset by something that is happening at the negotiating table for its global renewal with Spotify in 2019 and, as a result, has waived the license agreement with India to hold the hostage territory as a game of power. This may tarnish the first impressions of Spotify in India, as it is launched without the added value of one of the largest music catalogs in the world. It remains to be seen if the restriction of this mbad of content will affect the number of people who sign up and pay for Spotify in India, but it seems that Warner thinks this will be the case and will make Spotify more inclined to conclude a favorable agreement.
In the meantime, Spotify continued its launch in India, but without the Warner Music publisher Warner / Chappell Music. As Warner seems to hope, the first Spotify users in India were angry and were baffled by the limited listening options.
If Spotify took him to court, Warner would lose much of his influence and the consequences could be significant in India. . This would set a precedent by which on-demand streaming companies fall within the definition of "broadcaster", leaving an open window for companies like Apple Music, Netflix and Amazon to similarly bypbad negotiations in the country to obtain license fees for copyrighted material. Spotify may not be using this capability, but the increased bargaining power of on-demand streaming services could lead to further turbulence in the music industry.
Chances are Spotify and Warner will eventually resolve, and Warner's registered catalog will come at some point to Spotify's application in India. According to McCarthy, these relationships are an integral part of their business relationship and working together is ultimately in the best interest of both companies. Streaming now accounts for a significant share of label business revenue, and platforms such as Spotify need content from labels to work. But as long as they do not understand on a global scale, music lovers in India will have to deal with the effects, glued to using Spotify without access to the huge catalog of songs Warner / Chappell.
"Our goal is to be part of – a constructive short-term relationship with Warner," said McCarthy. "We consider them a partner. From time to time, some of us in our domestic relationships may have quarrels with our partners, but that does not mean we are going to divorce. They pursue their economic interests, we pursue ours … It is in our existential interest for us both to find common ground. [Same] with UMG and Sony. And we will do it. "
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