Accrued and Other Current Liabilities

12 Months Ended

Dec. 31, 2019

Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current


Note 9.			Accrued and Other Current Liabilities

Accrued and other current liabilities (in thousands):


	December 31, 2019		December 31, 2018
Royalties and other fulfillment costs	$	55,750	$	1,989
Employee compensation, commissions and benefits	6,858		4,444
Sales, VAT and other taxes payable	2,547		785
Operating lease liabilities - current	4,805		—
Other	7,343		4,094
Total accrued royalties, fulfillment and other current liabilities	$	77,303	$	11,312

Included in royalties and other fulfillment costs are Napster's accrued music royalties totaling $54.2 million at December 31, 2019. Napster’s agreements and arrangements with rights holders for the content used in its business are complex and the determination of royalty accruals involves significant judgments, assumptions, and estimates of the amounts to be paid.

The variables involved in determining royalty accruals include unmatched royalty accruals, revenue to be recognized, the type of content used and the country it is used in, outstanding royalty audits, and identification of appropriate license holders, among other variables. In addition, some rights holders have allowed the use of their content while negotiations of the terms and conditions are ongoing. In certain jurisdictions, rights holders have several years to claim royalties for musical composition.

While Napster bases its estimates on historical experience and on various assumptions that management believes to be reasonable under the circumstances, actual results may differ materially from these estimates in the event of modified assumptions or conditions.

Related to Napster's accrued music royalties are amounts that are advanced to certain music publishers for royalty amounts that have been agreed as being owed, but for which the underlying rights holder have not yet been specifically matched. These prepaid royalty amounts totaling $2.0 million at December 31, 2019 are included in Prepaid expenses and other current assets on the consolidated balance sheets. When these amounts are ultimately matched and invoiced to Napster, the prepaid royalty amount and the related accrued royalty liability are offset on the consolidated balance sheets.