Music-streaming giant Spotify – rumoured to be on the verge of going public – is being sued by a music publishing company for $1.6bn.
Spotify has more than 200 million users – 60 million paid-up subscribers and 140 million using the free ad-based service – compared with 30 million for Apple’s new paid music-streaming offering.
According to a report in the Wall Street Journal, Swedish-based Spotify is “expected to receive approval from the Securities and Exchange Commission to move forward with a listing of its shares on the New York Stock Exchange”.
However a law suit from Wixen Music Publishing could throw a spanner in the works over Spotify’s plans for an initial public offering (IPO).
$150,000 damages per song
Wixen, which handles music by artists such as Tom Petty, The Doors and Neil Young, alleges that Spotify has used artists’ music “without a license and without compensation,” according to documents filed in a California court on Friday.
More than 10,000 songs are listed in the law suit and Wixen is seeking the maximum damages allowed under US copyright law of $150,000 for each song.
Wixen alleges that Spotify “took a short cut” and only obtained rights to the sound recording for each song, when it should also have obtained rights for the musical composition.