Warner sues Spotify in India... and Spotify answers

It seems some kind of declaration of war has been issued. Indeed, Warner Music Group has filed an injunction against Spotify in a court in Mumbai (India). That's to say that one of the three major music companies is suing the largest streaming service in the world for copyright infringement.

Spotify’s launch in India - which has been a long time coming - was due on January 31st, 2019... but something went really erong. A Warner spokesperson told "Music Business Worldwide":

After months of negotiations, Spotify abruptly changed course and has falsely asserted a statutory license for our songwriters’ music publishing rights in India. We had no choice but to ask an Indian court for an injunction to prevent this. It’s our goal to hammer out a deal that works for everyone. We hope this is just a speed bump in the expansion of our long and successful global partnership.

As MNW explaied, it’s unlikely Warner would do a deal for recorded music but not simultaneously for music publishing; or vice versa. Indeed, the majors typically negotiate both sets of rights alongside one another in order to get the best result possible. That must mean Spotify, by reaching for this “statutory license”, is trying to figure out a way to launch with Warner’s publishing repertoire, but without a license for its recorded music.

This statutory license is most commonly used by broadcasters in the region to clear the performance rights to music for TV and radio. So, Spotify is attempting to use it to gain permission to use Warner/Chappell’s repertoire – which contains the rights to over 1 million copyrights – because the latter’s parent, Warner Music Group, has refused to ink a deal giving the platform access to its publishing catalog.

Now, Spotify has hit back, accusing Warner Music Group of reneging on a “previously agreed upon publishing license” and slamming the major music company for “abusive behavior would harm many non-Warner artists, labels and publishers, and prevent Spotify from competing in the market”.

A statement by Spotify said:

Warner Music Group (WMG) instructed Warner/Chappell Music (WCM) to file for an injunction in an attempt to leverage WCM’s local Indian publishing rights, to extract concessions in WMG’s global renewal negotiations for musical recordings. WMG revoked a previously agreed upon publishing license for reasons wholly unrelated to Spotify’s launch in India.
All other major labels and publishers have already agreed on economics and to license their music, and Spotify has also entered into a license with the local collecting society, while WCM remains the lone hold-out needed for a Spotify launch in India.
WMG’s abusive behavior would harm many non-Warner artists, labels and publishers, and prevent Spotify from competing in the market, leaving us no choice but to file for a statutory license. This statutory license, which allows for application to internet-based services, prevents WMG’s abusive practices, while ensuring all rights holders are compensated fairly.
Under the statutory license, Spotify will pay WCM and their rights holders rates that are in-line with the rates Spotify agreed to pay the leading Indian music entities, ensuring everyone involved will benefit from the new audiences and significant revenue the Indian market will bring. We will continue to assess our options at this stage.

While Warner and Spotify have been unable to reach a deal for India, sources say that Sony and Universal are close, if not already signed. It’s obvious to anyone who’s following this stuff why Warner may be the biggest hold-out.