The agreement will allow music publishers to get royalties for songs on Spotify (in the US) where the "ownership information was previously unknown," according to a statement by the NMPA.
Though the release doesn't specify how much money is involved, Billboard has pegged the total at $5 million in damages, plus $16-25 million Spotify owes publishers in unpaid royalties.
The agreement comes after Spotify has been hit with multiple class-action lawsuits regarding unpaid royalties. Those suits seek damages totaling in the hundreds of millions of dollars, but this deal could undercut them. The NMPA is the major trade association for American music publishers and songwriters.
"As we have said many times, we have always been committed to paying songwriters and publishers every penny," Spotify Global Head of Communications and Public Policy Jonathan Prince said. "We appreciate the hard work of everyone at the NMPA to secure this agreement and we look forward to further collaboration with them as we build a comprehensive publishing administration system."
According to the NMPA the agreement does the following:
- "Includes payment of bonus compensation."
- "Provides the ability to easily identify and properly claim 'unmatched' works online."
- "Ensures that Spotify will continue working with the NMPA and its members to implement practices that will allow Spotify to match works more accurately and efficiently."
- "Where ownership has not been identified or claimed by publishers, there will be a distribution to publishers and songwriters of royalties held by Spotify based on known usage on Spotify's service."
- "Provides a path to direct licensing between Spotify and publishers, with the goal of strengthening business relationships."