David Lowery, a musician and member of Camper Van Beethoven and Cracker, has penned an open letter to The Honorable Eric T. Schneiderman – Attorney General of New York – requesting an investigation into Spotify and YouTube withholding royalties from songwriters.
As Lowery points out in his letter: “Spotify’s practice is to ‘escrow’ royalties for songwriters whom Spotify has not located, and it is our understanding that YouTube also follows this practice, as may other services. Some estimate that the total sums being held in this manner by Spotify, YouTube and Google are in the tens of millions of dollars.”
This process is severely flawed as Spotify make it impossible for songwriters to find out if they are owed any of these escrowed funds as they are not disclosed, let alone paid.
Lowery points to 2004 action taken by State Attorney General Spitzer’s office for inspiration on how to tackle digital music providers’ avoidance of royalty payments.
Under Spitzer, a two year investigation revealed royalties that record companies were failing to pay to artists and songwriters they had fallen out of contact with. As a result new procedures were put in place to ensure compensation and future royalty payments would be received by the performers and songwriters in question or their estates. In the event of unclaimed royalties, payments are turned over to the state until a claim is made.