Napster and Sonos Sued for $3.4 Million in Unpaid Royalties

• Collective rights management organization SoundExchange sued Napster and Sonos.
• The court filing focuses on the Sonos Radio service, initially based on Napster’s music catalog.
• The lawsuit alleges that underpaid statutory copyright royalties of over $3.4 million are owed to SoundExchange.

Music streaming platforms Napster and Sonos are facing legal action from SoundExchange, a collective rights management organization, over alleged unpaid royalties amounting to $3,423,844.41. 

Filed in a California federal court, the lawsuit focuses on royalty payments related to the “Sonos Radio” service, which initially relied on Napster's licensed music catalog.

Sonos Radio launched in April 2020, with Napster serving as the designated agent for music licensing and royalties. While payments were consistent initially, they reportedly ceased in May 2022 after Napster was acquired by venture capital firms Hivemind and Algorand. 

This acquisition emphasized "web3" technologies, including blockchain and cryptocurrencies, and allegedly led to a breakdown in royalty reporting and payments.  

An audit by SoundExchange in 2023 uncovered the payment discrepancies. The organization claims that millions in royalties, interest, and late fees remain unpaid for the period between October 2022 and April 2023. 

Despite Sonos shifting its music catalog to Deezer in April 2023 to resolve licensing issues, SoundExchange has demanded full compensation for the unpaid royalties, alongside damages for Copyright Act violations.

Napster has experienced numerous ownership changes since its original file-sharing days. It now operates as a legal streaming service after years of rebranding. 

Its most recent acquisition by Infinite Reality aims to enhance its offerings while supporting artists and music fans. However, neither Sonos nor Napster has commented publicly on the lawsuit.