Spotify Cuts Its Legal Challenges with $112 Million Settlement

Settlement approved despite objections by Wixen

Spotify (SPOT) recently won court approval of a settlement reached with certain disputing songwriters. The settlement calls for Spotify to pay $112.0 million to compensate songwriters who didn’t receive their full royalties. Three years ago, two class action lawsuits were filed against Spotify, in which the company was accused of not paying enough in royalties for songwriters’ work. The two lawsuits were later merged.

After a series of court battles, Spotify struck a settlement deal in May 2017 with the disputing songwriters. However, the settlement was opposed by Wixen, a music publishing company that represents artists such as Neil Young and the late Janis Joplin. Alison Nathan, United States District Judge of the United States District Court for the Southern District of New York, approved the settlement despite Wixen’s objections.

Spotify Cuts Its Legal Challenges with $112 Million Settlement

Spotify faces more lawsuits

Although the settlement doesn’t entirely eliminate Spotify’s legal challenges related to royalty payments and copyrights, it reduces the company’s legal problems. Wixen, the music publishing company that opposed Spotify’s $112.0 million settlement with songwriters, is suing the company for $1.6 billion. The case is ongoing, and Spotify faces two other copyright lawsuits.

75 million premium subscribers

Spotify closed the first quarter with 75.0 million premium subscribers, who pay $10 per month for its music service. The company generated revenues of $1.4 billion in the first quarter. That compared to $319.2 million in revenues generated by Pandora (P) and $31.2 billion in revenues generated by Google parent Alphabet (GOOGL) in the same quarter.

Amazon (AMZN) and Tencent (TCEHY) posted first-quarter revenues of $51.0 billion and $11.7 billion, respectively. Pandora, Google, Amazon, and Tencent are all battling Spotify for revenues in the on-demand music market.