Pandora has a gaggle of attorneys and lobbyists camping out at Capitol Hill, all pressing for lowering royalty obligations. Now, Spotify is getting into the same game.
According to details just leaked by DC insider Politico, Spotify is now retaining the services for four high-priced lobbying firms: Forbes-Tate, Peck Madigan Jones, Gibson Group and BakerHostetler.
That complements an additional two lobbying firms employed by Spotify in Europe, according to the report.
But why, exactly? And why now? Pandora’s entire business model hinges on government-mandated royalty rates and regulations, and major publishers are battling to undo age-old laws that limit their royalties. Spotify not only has an online radio feature, but its on-demand streaming service also involves a range of royalty payouts, including mechanical licenses. Beyond that, Spotify pays 70+ percent of all of its revenues to recording labels and content owners through open market negotiations, something it might be trying to change.
Then, there’s Apple, which is about to drop Beats onto Spotify’s head, and thousands of exclusives with it.
EU regulators are already examining Apple’s market power in this space, and the potentially unfair advantage. That includes a bundled Beats, which could crowd out Spotify on iOS decks and steer artists away from Spotify, fair or otherwise.
Back in the US, Apple spent more than $4.1 million on Capitol Hill lobbying last year, and that’s just what we can see above the table. Apple currently employs six separate lobbying firms: Bernstein Strategy Group, Capitol Tax Partners, Fierce Government Relations, Franklin Square Group, Glover Park Group and Wilmer Cutler Pickering Hale and Dorr.
Source: Digital Music News