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Ministry of Sound vs Spotify: 'Support for Spotify is dangerous'

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Eyebrows were raised last week when Ministry of Sound CEO Lohan Presencer announced that his company would be suing Spotify over user playlists.

The electronic music brand is unhappy about track collections that copy its own CD running orders, with some fans even using the Ministry name in their titles.

Lohan Presencer

© Rex Features / Alex Lentati/Evening Standard

Lohan Presencer



Below, Presencer tells Digital Spy exactly why Ministry of Sound is suing Spotify, why it thinks it can win, and why Spotify isn't the answer the music industry needs.

"We built our business over the last 20 years on the basis of curating music," Presencer said.

"We employ a huge team of people who are specialists in their areas of music, on different genres of music - and monitoring what's going and what might be popular.

"We painstakingly compile, order and then release and market these compilation albums, and have done for 20 years. We release about 50 albums a year, we've sold 50 million albums in our history and we believe there's intellectual property [IP] generated in what we've done and what we do.

"That property has the right to be protected in exactly the same way as the copyright of the individual tracks themselves."

Ministry of Sound

Ministry of Sound



Asked if the brand is confident of success should the matter go to court, Presencer added: "We wouldn't have launched a legal action unless we were confident. We received solid legal advice that said there was IP generated there.

"There are legal precedents that clearly demonstrate that there is copyright in a database right. There are plenty of European law case histories that demonstrate that that's the case.

"We're not interested in pursuing individual users - that's not what this is about. Of course people are going to use a service that enables them to put together playlists. All we're thinking is for Spotify to take those Ministry ones down.

"We're saying that these are exact copies of the intellectual property we have generated and once we've drawn your attention to it - particularly in circumstances where some of those playlists have got our name and brand attached to them - we'd like you to take them down."

Spotify

Spotify



Of comments from DS readers claiming that Ministry would not be able to win its case, Presencer replied: "Our stance is backed up by legal precedent. If the Football League can win an argument that says there's copyright in their fixtures list, there's well-written legal precedent on this. For example, if you were to write a list of the '100 Greatest Poems of All Time', that is something that is subject to your choice, your creative selection.

"Let's say you did a compilation album of the No. 1s of the year - that's just a mechanical process that gathers together all the records that have been No. 1 that year. However if you're doing a compilation that's 'The Best of the '70s', there's an element of selection and choice that goes into that and that introduces subjectivity into the process.

"I don't think that anybody could argue that there's no value in what we do, because what we do is something we've built our business on over 20 years. Whether people feel that there is copyright in that or not is not really a case of opinion, it's a case of law."

Lohan Presencer

© Rex Features / Alex Lentati/Evening Standard

Lohan Presencer



Of whether streaming is bad for new artists, Presencer said: "I wouldn't necessarily say that streaming is detrimental to new artists, but I question why the majors are so supportive of a business model that is so clearly unsustainable in the long term.

"There are, in the great scheme of things, not a great deal of users on the service compared to the number of music consumers on a global level. Revenues that it generates are not significant in comparison to the revenues the music industry generates from somewhere else.

"Most worryingly it loses so much money and continues to lose money, and its losses are widening. That's not a sustainable business model. It's very dangerous, we believe, to support a service where there's no long-term prospect of it succeeding, but at the same time it also paints a picture for the consumer that music is free, which it isn't.

"As much as your readers and maybe you would like to believe that the internet opens up new forms of consumption and allows music to be consumed freely by people - music needs to be paid for. This is not record companies filling their pockets with cash.

"If you want new music, we need to be able to invest in it. We don't do 360 deals with our artists. We don't make lots of money from merchandise and ticket sales. We're a pureplay music company and in order to invest in and develop new artists, which is a hugely expensive process, we need to derive revenues from the sales of that music."

Daniel Ek

© PA Images / Vince Bucci

Spotify's Daniel Ek



He continued: "We know why the major record companies support it - because they've been incentivised with equity and with large advances. We're more independent. We don't have the benefit of those large advances or indeed that equity stake, so we have to look at the business on face value - and it doesn't add up for us.

"I think subscription-based streaming is potentially a model for the future of the industry. I don't believe a free model is the way forward - or ad-funded model - I think it's very difficult to make those numbers stack up."

Presencer added: "I think a business model for quite a few digital internet businesses - and I wouldn't be able to comment on whether this is Spotify's model - but for quite a few of these businesses you need to get scale as quickly as possible and either sell the business to somebody who sees value in that scale, or to IPO the business, which is effectively the same thing, and recoup your investment capital.

"The objective is not necessarily to develop a profitable business. That's a completely different process to running our company, where we do need to run a profitable business, because we need to continue to pay our overheads and we need to continue to pay our artists.

"We do that out of the money that we generate rather than taking money from investors and venture capitalists, who want to see a return on it. Those are some of the awkward questions that need answering about the long-term strategy of Spotify. What are its objectives? Does it want to turn a profit? When [Spotify founder] Daniel Ek has been interviewed he says he's not concerned about profit - but what does that mean long-term?"

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