What the Camper Van Beethoven Suit Means for Spotify and Other Streaming Services

David Lowery is the frontman of Camper Van Beethoven and Cracker. He’s also leading a $150 million class action suit against Spotify. The lawsuit alleges that Spotify “knowingly, willingly, and unlawfully reproduces and distributes copyrighted compositions without obtaining mechanical licenses,” Billboard reports.

Lowery’s lawsuit, which is a class action suit because there’s a particular group with at least 100 possible interested parties, is yet another crack in the burgeoning streaming empire. If Lowery’s claims that Spotify has distributed copyrighted music to 75 million users without identifying or locating the rightsholders for compensation is true, then they may have to do more than just pay out the $150,000 per infringed song. It’s one thing to pay meager returns for artists’ work — it’s kind of the platform on which the industry is built — it’s another to have shady business practices that don’t even try to pay those minuscule fees.

Pandora, the internet’s preeminent radio station, just lost a ruling with the U.S. Copyright Royalty Board that’ll force it to pay more money per song stream. It’s significant enough to threaten the service’s viability as a profitable business model. (An important note being that Pandora pays the government, where Spotify works out agreements with major labels). Lowery, for what it’s worth, has spoken out against Pandora in the past, as well. In 2013, he shared that Cracker’s hit song “Low” had 1,159, 000 Pandora streams, yet the band saw just $42.25 from that (and when split among band members, Lowery got just $16.89). But even though Lowery didn’t get much from Pandora, he still got something, and Pandora explained to him exactly what that was. Spotify is apparently trying to avoid payment altogether.

Lowery, for what it’s worth, has spoken out against Pandora in the past, as well. In 2013, he shared that Cracker’s hit song “Low” had 1,159, 000 Pandora streams, yet the band saw just $42.25 from that (and when split among band members, Lowery got just $16.89). But even though Lowery didn’t get much from Pandora, he still got something, and Pandora explained to him exactly what that was. Spotify is apparently trying to avoid payment altogether.

If Lowery wins his suit over Spotify, the service will immediately have to remove all works from the library until Spotify receives a mechanical license for legal redistribution of material in addition to the massive payout. It does not mean that Spotify (and similar services like Apple Music and Tidal) will be required to compensate artists more fairly for music. It does show, however, that it is not an impossible giant to defeat. If artists notice that their music is being used without permission, then Spotify would have to pay a whole lot more than the $16.89 (to use Pandora’s numbers) that would otherwise be necessary.

Spotify has toyed with the idea of putting in-demand artists (i.e., Taylor Swift and Adele) behind the premium paywall to entice “freemium” users into buying a subscription. While that would possibly bring more customers, it would not satisfy the hundreds of thousands of undervalued artists in the Spotify catalog who could pull their music without anybody — even Spotify — noticing. But if Spotify loses too many of the musicians who make up the meat of the operation, then it would end up looking like Tidal — some glitzy stars up top but nothing new underneath. If Spotify loses this suit, it could take preemptive action. Better to pay the small folks now than run the risk of losing them — or a bigger suit — in the long run.