Spotify sued by Warner Music ahead of India launch

Days ahead of it India launch, Spotify, the world’s largest music streaming company, has fallen into trouble, with Warner Bros filing an injunction in the Bombay High Court over certain music rights.

Warner has requested the court for an injunction to prevent Spotify from offering songs by its roster of song writers, including Katy Perry and Led Zeppelin.

Warner Music was an investor in Spotify but sold its stake in the Swedish firm in November last year.

Spotify, which has been readying its India launch with partnerships already in place with large record labels such as T-Series and Sony, has been unable to firm up its licensing agreement with Warner Music. It has blamed the Warner Music Group (WMG) for revoking a previously agreed upon publishing licence for “reasons wholly unrelated to Spotify’s launch in India”.

Unrelated reasons

“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 licence for reasons wholly unrelated to Spotify’s launch in India,” a Spotify spokesperson told BusinessLine .

“All other major labels and publishers have already agreed on economics and to license their music, and Spotify has also entered into a licence with the local collecting society, while WCM remains the lone hold-out needed for a Spotify launch in India,” the spokesperson added.

Statutory licence

Spotify said the injunction would prevent it from competing in the market, leaving the music streaming firm with no choice but to file for a statutory licence. The statutory licence is typically meant for TV and radio broadcasters and is seen as a way to circumvent the deadlock in reaching a licensing agreement with the music label.

“This statutory licence, which allows for application to internet-based services, prevents WMG’s abusive practices, while ensuring all rights holders are compensated fairly. Under the statutory licence, 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,” Spotify said.

Spotify last year roped in former OLX India CEO Amarjit Singh Batra to head its India operations. Former Google employee Akshat Harbola also joined the company as its head of market operations.

Aggressive hiring

The company has at least a dozen employees in its Mumbai office and it is aggressively hiring in the country as it builds its local base here.

It will be in for a huge competition in India where players like Saavn and Gaana already have a strong base. India has also seen global players such as Amazon, Google and Apple offering their music streaming services at aggressive prices.

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