Whatever ownership is at the helm, Napster and lawsuits go together like peanut butter and jelly.
Now under its sixth different owner since the infamous peer-to-peer file sharing platform revolutionized the music industry, illegally, in 1999, the present iteration of Napster has been hit with a lawsuit from Sony Music Entertainment over $9.2 million in unpaid royalties and licensing fees, its third this year alone.
Sony’s lawsuit, filed August 1 in U.S. district court, alleges that the streaming platform’s parent company, Rhapsody International, is over a year late on required payments for using the major label’s catalog, “all while [continuing] to collect subscription fees from their millions of paying users.” The complaint alleges that four licensing agreements have been violated.
Though the Napster most music fans know was shut down in 2001 after the RIAA, artists like Metallica and Dr. Dre, and a consortium of major labels, including Sony, famously sued the company for copyright infringement, Rhapsody International purchased its brand likeness from Best Buy in 2011 before rebranding its own service as Napster in 2016. Since the purchase, Rhapsody has been bought and sold three times.
When Web3 startup Infinite Reality bought Rhapsody International in March of this year, the sale, per Music Business Worldwide, triggered a clause in Napster and Sony Music’s licensing agreement that would have allowed Sony to break the deal. At the time, Napster already owed Sony $6.79 million in overdue payments, according to the lawsuit, but the major label agreed to continue the contract as long as Rhapsody settled its debts in a four-part payment plan. The first three installments were due by May.
Since then, Sony claims Rhapsody has not made any previous or new licensing payments, and terminated the contract with Napster in June. Sony’s catalog, however, remains available to stream on the platform, with the label now seeking damages of “$150,000 per infringed work,” across a list of 240 songs.
Sony Music isn’t the only company that’s been stiffed by Napster as of late. According to a January report from Billboard, at least six labels and distributors have accused the platform of making late royalty payments, including Sonos and SoundExchange, which sued the company in June for over $3 million in unpaid royalties.Featured image courtesy: Napster.
