Authors: Susan H. Abramovitch, Madison MacColl
Last week, Canadian rock icon Neil Young published an open letter to Spotify in which he threatened to take down his music if Spotify did not remove Joe Rogan's podcast from the platform. According to Young, the Joe Rogan Experience spreads lies and misinformation about COVID-19 and vaccinations, which Young argues that Spotify has a duty to mitigate. "They can have Rogan or Young. Not both," declared Young. One week later, making good on his promise, Neil Young's music was taken down from Spotify, a platform that Young says represents approximately 60% of his streaming revenue.
Due to the complex nature of music rights, disputes will often affect more parties than initially meet the eye. So in this case, who else is impacted by this decision? What kind of income streams will be lost as a result? Joni Mitchell and others have followed suit. Can we expect more artists to do so? And how did Neil Young manage to pull his music from Spotify in the first place?
How did Neil Young manage to pull his music?
The short answer: he didn't – because he doesn't have full control over his music.
A typical record deal between an artist and a record company usually places control over distribution agreements with streaming services, such as Spotify, in the hands of the label rather than the artist. Spotify's increasing importance as an exploitation outlet for music over the recent decade gives it substantial leverage over the labels from which they source the music – as the majority of the money made by record labels these days flows from streaming deals.
To be sure, Neil Young was the driving force behind his departure from Spotify. However, since Neil Young is not the owner of the sound recordings, Spotify's agreement was not with Young; rather, the contractual relationship would have been between Spotify and Warner Music Group, the owner of Neil Young's record label, Warner Records. As such, the call to take down Young's recordings from Spotify was Warner's and not the artist's. (Although some big artists may be able to negotiate an approval right over their label entering into certain licenses, it is unusual for an artist to have the right to withdraw that approval once granted, especially in the case of a key distribution outlet like Spotify). That being said, a label would not easily want to act contrary to the wishes of an artist of the stature – and public profile - of Neil Young. Hence, the take down. But those impacted by this decision were not limited to Neil Young, Warner Music Group and Spotify.
Who else does this decision impact?
Aside from the obvious answer - Neil Young fans with Spotify accounts – this defiant act also affects Neil Young's music publisher, Hipgnosis. In each Neil Young recording, there are two separate music rights: the right to the recording and the right to the underlying composition embodied on that recording. Music streaming triggers royalties to the owners of both the musical composition and the sound recording. The label and the artist are entitled to royalties earned from the sound recording and the songwriter and music publisher are entitled to royalties generated from the musical composition.
Who is giving up what and how much?
As an artist, it has been reported that Neil Young is giving up approximately $600,000 in yearly streaming royalties. That is in addition to the income Warner Records would be foregoing. Further, Neil Young and Hipgnosis will no longer be generating publishing revenue from Spotify. As reported, last year Neil Young's music earned an approximate total of $308,000 in publishing revenue from Spotify. Hipgnosis has essentially been forced to give up their share of this amount – making some wonder if the $154 million they just paid last month to acquire his catalogue was worth it.
Will other artists follow suit?
Fellow Canadian artists Joni Mitchell and Gilles Vigneault have already followed Neil Young away from Spotify. Just like Neil Young, these artists have been blessed with the critical support of their record labels – support that a majority of artists may not receive as easily. Lesser-known artists may also be unwilling or financially unable to give up such an important revenue stream. With live performances greatly reduced during the pandemic, streaming revenue could be the sole source of income for many artists. Keeping that in mind, we imagine that many artists will keep on rockin' (while Joe Rogan keeps on talkin') in a free world.
Should you have any specific questions about this article or would like to discuss it further, you can contact the authors or a member of our Entertainment & Sports Law Group.