Spotify files to go public in NY

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Wixen, a Californian company that collects royalties on behalf of artists including Tom Petty, Neil Young, Janis Joplin and the Doors, alleges that Spotify "took a shortcut" when it cut deals with major labels to host their back catalogues.

According to news website Axios Spotify has filed documents for an initial public offering (IPO) in December.

If the company lists on the New York Stock Exchange, as expected, it would be the first to do so with a direct listing.

The "direct listing" means Spotify will enter the markets without the need for a lengthy roadshow process or high banker fees. Spotify declined to comment.

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The company was founded in 2006 and has pioneered legal streaming, which has become the music industry's biggest source of growth despite early scepticism. But Spotify failed to properly obtain the equivalent rights for the compositions. Those cases also charged Spotify with playing music without proper licensing and compensation.

According to the documents filed by Wixen, Spotify has approximately 30 million songs in its catalogue, and they allege that the company has infringed almost 6,300,000 of them, or around 21 per cent of its roster.

"The Settlement Agreement is procedurally and substantively unfair to Settlement Class Members because it prevents meaningful participation by rights holders and offers them an unfair dollar amount in light of Spotify's ongoing, willful copyright infringement of their works", reads a statement from Wixen.

With 60 million paying customers and additional advertising revenue, Spotify are not thought to be looking to raise capital, but are instead attempting a unique trading system known as "direct listing".