Jay Z’s Tidal Hit with Next Wave of Class-Action Lawsuits

Streaming music service Tidal faces a $5 million class-action lawsuit for allegedly not paying royalties to Yesh Music, LLC and John Emanuele from the

Subscription News: Jay Z's Tidal Hit with Next Wave of Class-Action Lawsuits

Source: Tidal

Streaming music service Tidal faces a $5 million class-action lawsuit for allegedly not paying royalties to Yesh Music, LLC and John Emanuele from the band The American Dollar, says Digital Trends. According to the suit, at least 118 of the band’s songs were streamed on Tidal without proper licensing or royalty payments. This is particularly ironic because when Jay Z and friends acquired Tidal last spring, Jay Z touted the service as being artist-friendly and would pay 75% of royalties per song to musicians. The Next Web reports that Tidal has pulled all of American Dollar’s music from its service and made the following statement to Vulture:

Subscription News: Jay Z's Tidal Hit with Next Wave of Class-Action Lawsuits

Source: Creative Commons labeled for reuse

“Tidal is up to date on all royalties for the rights to the music stated in Yesh Music, LLC and John Emanuele’s claim and they are misinformed as to who, if anyone, owes royalty payments to them. As Yesh Music, LLC admits in their claim, Tidal has the rights to the Master Recordings through its distributor Tunecore and have paid Tunecore in full for such exploitations. Their dispute appears to be over the mechanical licenses, which we are also up to date on payments via Harry Fox Agency our administrator of mechanical royalties.

The main compositions in question were release (sic) by The American Dollar and their entire catalogue streamed fewer than 13,000 times on Tidal and its predecessor over the past year. We have now removed all music associated with Yesh Music, LLC and John Emanuele from the service. This is the first we have heard of this dispute and Yesh Music, LLC should be engaging Harry Fox Agency if they believe they are owed the royalties claimed. They especially should not be naming S Carter Enterprises, LLC, which has nothing to do with Tidal. This claim serves as nothing other than a perfect example of why America needs Tort reform,” the statement says.

This lawsuit was filed about a month after Spotify was hit with two-class action lawsuits totaling $350 million. One suit for $150 million was filed by musician, songwriter and producer David Lowery who alleges Spotify engaged in direct copyright infringement and unfair business practices.

Another lawsuit for $200 million was filed by artist Melissa Ferrick who accused Spotify of “wholesale copyright infringement.” As Spotify fights these suits, Digital Music News reports that other streaming music services including Xbox Music, Groove Music, Google Play Music, Rhapsody and Slacker may also be sued in similar cases. Digital Music News says the common thread in these cases is mechanical licensing.

So far, Apple Music and YouTube are in the clear, having jumped through all of the appropriate legal hoops. It is not clear what Pandora’s status is. Insider Take:The streaming music subscription model is under pressure on a lot of different fronts, including these class-action lawsuits which allege improper licensing, copyright infringement and lack of royalty payments.

Spotify and Tidal may be the first to be named in such suits, but if there are fundamental flaws in the process, there will be more. There are other challenges too in terms of competition, market dynamics and licensing issues. Some companies will rise to the challenge, while others may not. There are some lessons for other subscription companies here:

  1. Make sure your licenses are complete, up-to-date and free of any potential pitfalls.
  2. Ensure that your operation can immediately pull content and/or show that you have the appropriate rights to use that content on a moment’s notice. Don’t wait for a lawsuit to materialize before you check your records.

We applaud Tidal for the company’s quick response to the lawsuit and for pulling the content in question. As always, we’ll be watching this as it unfolds and we’ll keep you posted. 

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