Warner Music Group has filed an injunction against Spotify to stop the streaming service from illegitimately using Warner's publishing rights as part of its long-awaited launch in India.
Spotify is expected to launch its Indian service imminently and has spent the past several months negotiating license deals with all three major labels, as well as the publishers, indies and local labels that dominate the domestic market. Billboard understands that deals with Universal and Sony Music are close to being concluded, but that an agreement with Warner Music remains some way off.
At the heart of the disagreement is Spotify's plans to launch an extended free tier service in India, paying rights holders a far lower streaming rate than other international markets.
With both parties at a deadlock and Spotify's planned India rollout fast approaching, the streaming service appears to have made the surprise decision to prepare to launch in the country without having license deals for Warner's recorded music or its publishing repertoire (managed by Warner/Chappell) in place.
Instead, sources indicate, Spotify is claiming a statutory license typically meant for TV and radio broadcasters for Warner's publishing rights.
In response the label filed an injunction in the Mumbai courts this morning (Feb. 25) to stop what it regards as the illegal use of its repertoire.
In a statement, a Warner Music Group spokesperson said: "After months of negotiations, Spotify abruptly changed course and has falsely asserted a statutory license for our songwriters' music publishing rights in India.
"We had no choice but to ask an Indian court for an injunction to prevent this. It's our goal to hammer out a deal that works for everyone. We hope this is just a speed bump in the expansion of our long and successful global partnership."
In response, Spotify issued a lengthy statement accusing Warner Music Group (WMG) of filing the injunction "in an attempt to leverage [Warner/Chappell Music's] local Indian publishing rights, to extract concessions in WMG's global renewal negotiations for musical recordings."
The streaming giant goes on to say that Warner "revoked a previously agreed upon publishing license for reasons wholly unrelated to Spotify's launch in India."
It continues: "All other major labels and publishers have already agreed on economics and to license their music, and Spotify has also entered into a license with the local collecting society, while [Warner/Chappell Music] remains the lone hold-out needed for a Spotify launch in India. WMG's abusive behavior would harm many non-Warner artists, labels and publishers, and prevent Spotify from competing in the market, leaving us no choice but to file for a statutory license."
Spotify adds that the statutory license it seeks to use for Warner's publishing rights will ensure all rights holders are compensated fairly for the use of their works and that payment rates are "in-line" with those agreed with leading music labels and publishers in India. The statement concludes, "We will continue to assess our options at this stage."
Spotify first announced its plans to launch in India last March. A stock filing at the time reported that it had opened an office in Mumbai and hired 308 staff. Former OLX India CEO Amarjeet Singh Batra is understood to head the streaming platform's Indian operations, although his appointment has never been officially confirmed (his LinkedIn profile simply lists him as Spotifier).
Earlier this year, Spotify announced that it had signed a licensing deal with T-Series, one of India's leading music and film companies with a catalog of more than 160,000 songs, spanning Bollywood and domestic repertoire.
When Spotify's India rollout does finally happen -- with or without Warner repertoire – the company faces strong competition from market-leading platforms Gaana and JioSaavn for subscribers.
Amazon, Apple Music, Google Play and domestic services Wynk and Hungama are also active in India, which boasts a population of 1.3 billion people and has long been seen by the music industry as a region with huge potential for growth.