Spotify's Royalty Fight Is A 'Double-Edged Sword'

Recently, Spotify removed the recordings of hundreds of comedians — including the works of Jim Gaffigan, John Mulaney and Kevin Hart — in the midst of a dispute over royalties.

According to Alexandra Canal at Yahoo! Finance, it's a move that underscores the fight that many podcasters, comedians, poets and other spoken word artists are facing as streaming dominates the entertainment sector, and raises questions about how to compensate those involved. 

Spoken Giants, a rights administration company founded in 2019, has led the royalty fight for these types of performers. CEO Jim King, who previously worked as an executive at music performance rights organization BMI, said the company "is a reflection on the growing emphasis and power of spoken word."

Historically, "comedy has been paid for the master recording or the sound recording, but comedians have never been paid for their writing," King told Yahoo Finance Live in an interview. 

He added that the goal is to mirror the same payment structure of songwriters, who receive their own royalty payments within the music industry. 

"We're not trying to recreate anything. We're not trying to set any new precedents. From a rate standpoint, we believe that comedy writers should be paid the same as songwriters, lyricists, and composers are in the music industry," the CEO explained. 

According to Spoken Giants, the current target rate per stream is $0.004; therefore, a comedy track with 50,000 monthly plays will lead to $200 in royalties. A comedy track with 1,000,000 annual plays will equal $4,000 in royalties, and so on. 

In a response to an inquiry from Yahoo Finance, a Spotify spokesperson said that the streaming giant has shelled out "significant amounts of money for the content in question, and would love to continue to do so."

However, "given that Spoken Giants is disputing what rights various licensors have, it’s imperative that the labels that distribute this content, Spotify and Spoken Giants come together to resolve this issue to ensure this content remains available to fans around the globe," the spokesperson added.

King revealed that Spoken Giants has reached out "multiple times" to the streaming platform since the decision to remove the comedians on the eve of Thanksgiving.  

"We would love to work with them. Our goal is to support Spotify as an important platform in the industry, but also, very importantly, support our members. We are very surprised by this aggressive move, and we wish to speak with them directly and start negotiations back up again as soon as possible," King added. 

Spotify remains a huge platform for comedians and the removal is a big blow to artists who value the exposure and greater access to fans. 

"It's a double edged sword for consumers, for the platforms, and very importantly for our members," King said.