Almost three years after the law firm Michelman & Robinson filed a putative class-action lawsuit against Rhapsody International on behalf of David Lowery and fellow songwriters Victor Krummenacher and David Faragher for infringing their mechanical rights, a deal to end the case is moving forward.
Late Friday night (Feb. 15), the firm filed in the U.S. District Court of Northern California a motion for preliminary approval of a settlement that will get self-published songwriters $35 for every composition Rhapsody played that’s registered with the U.S. Copyright Office and $1 for every unregistered composition the service played at least 24 times. Like the case against Spotify settled in 2017, this involves the service’s failure to properly license and pay for songwriters’ mechanical rights -- and bringing it to a close will allow Rhapsody to move forward with less uncertainty.
The total damages Rhapsody will pay are capped at $10 million -- with songwriter payouts reduced if too many claims come in -- although the cap could increase to $20 million if the company’s financial situation changes. (Rhapsody has already reached a settlement with the National Music Publishers’ Association that covers the majority of the compositions it infringed.) Additionally, Rhapsody will set up an artist advisory board with an annual budget of at least $30,000 to promote the service as a creator-friendly platform, and institute an “artist referral program” that will give creators a $10 fee for each subscriber they refer. Although the class action settlement with Spotify calls for the creation of a mechanical licensing committee, this goes further in establishing the involvement of creators.