Napster & Sonos Royalty Lawsuit: Millions Claimed
Napster,sonos Face $3.4 Million Lawsuit Over Unpaid Royalties
Napster and Sonos, a major audio equipment manufacturer, are facing a lawsuit from SoundExchange for allegedly failing to pay $3.4 million in copyright royalties. The suit centers on royalties owed for the “Sonos radio” service, which utilized Napster’s music catalog until April 2023.
SoundExchange, a collective rights management association, filed the complaint, alleging missed payments for Sonos Radio. The service launched in April 2020,with Napster acting as the authorized agent,initially submitting royalty reports and payments. However, payments reportedly stopped around May 2022.
The lawsuit claims that Napster’s acquisition by venture capital firms Hivemind and Algorand, with a focus on web3 technologies, led to a “complete breakdown of reporting and payment” for the Sonos Radio service. An audit initiated by soundexchange in 2023 revealed the alleged royalty shortfall.
Sonos transitioned to Deezer for its radio service around April 2023, seemingly resolving the royalty issues moving forward. However, SoundExchange maintains that it is still owed more than $3 million for past royalties. The core of the issue revolves around the role Napster played as an agent, and the royalties due. The SoundExchange audit brought the issue to light.
SoundExchange stated that Sonos and Napster failed to pay at least $3,423,844.41, covering royalties from October 2022 to April 2023, including interest, late fees, and auditor costs, minus payments already made. The organization seeks full compensation, citing ongoing accrual of late fees and interest.
The complaint includes counts of “underpayment” and “non-payment” of statutory royalties, requesting damages of at least $3.4 million for the alleged Copyright act violations.
What’s next
The legal proceedings will determine whether Sonos and Napster are liable for the unpaid royalties and associated fees, potentially setting a precedent for royalty payments in the evolving digital music landscape.