The following MBW op/ed comes from Annabella Coldrick, the CEO of the Music Managers’ Forum (MMF). Based in the UK, the MMF’s 1,200-plus members include managers representing artists including Arctic Monkeys, Dua Lipa, Robbie Williams, Radiohead, and Nile Rodgers.
Friday’s announcement from Sony Music Entertainment could be a seismic moment for the recorded music business. It effectively commits to writing off unrecouped balances for all artists who signed to the music major before the year 2000, opening a door to those individuals generating royalties from streaming and other online usage of their work. In many cases, for the first time.
This comes, of course, when there is a growing discontentment with the disparities of how streaming revenues are allocated. Although these disparities have long been apparent – we at the MMF have highlighted them for over five years, through our Dissecting The Digital Dollar project – the discontentment has been accelerated by the pandemic, spilling out in front of British politicians at the UK’s Parliament DCMS Select Committee. The economics of streaming are now headline news.
In this context, Sony’s move is clear, strong and sensible.
The “ownership” of catalogue has provided a bedrock for the major labels to benefit enormously from streaming – offering almost total leverage in licensing negotiations, and creating a veritable cash cow in the process. For repertoire that was signed, marketed and paid for in the analogue era, and under deal terms where a vast majority of artists were unlikely to recoup, a significant proportion of streaming revenues has flowed straight to the labels’ bottom line. To the tune of more than $1m per hour.
Theoretically, this starts to change under Sony’s Artists Forward initiative, opening the door for all Sony-affiliated artists signed before 2000 to benefit from a market that now represents the bulk of global recorded revenues.
More than that, Sony’s definition of “participants” appears generously broad, including producers, JV partners and other distributed labels that have partnered with the major, while payments will reportedly be backdated to January 1st 2021.
This is all to be welcomed. As much as the financial positives, such a recalibration could also signify a much-needed cultural and mental reconnection with streaming.
Of course, Sony were not the first here. Beggars Group have proactively exhibited their artist-friendly credentials for years – not only wiping off unrecouped balances after 15 years, but also introducing minimum digital royalty rates. BMG too have made important commitments to fairness and transparency this year. It is important we acknowledge these pioneers.
However, a major music corporation committing to change feels, in some ways, even more significant – sending a clear message to shareholders and to competitors that the status quo is unsustainable. It’s now a great opportunity for the other major labels to step forwards. It’s difficult to see how they can do otherwise.
Wiping historic unrecouped balances was just one of the recommendations made by the MMF and Featured Artists Coalition in our joint evidence submission to the DCMS Committee. However, other reforms are also required. For instance, in terms of legacy deals, we also think it imperative that digital royalty rates are updated, and that contractual hangovers from the analogue era (such as packaging or ‘technological’ deductions) are disregarded.
On the other side of the equation, urgent reforms are also required for songwriters, particularly to address the inefficiencies around “royalty chains” and “black box” allocations. Both are problems that stop hundreds of millions of pounds going into the pockets of music creators, and both are problems that the industry itself has the power to address.
So that’s our message to the wider industry. It’s right that we recognise this forward-thinking move by Sony Music, but let’s keep going. We’re only getting started here, and there’s more to be done so that all artists share in the uplift from streaming.
This isn’t the moment to step back and applaud, it’s the moment to step up, to embrace further change to make the music business fairer, more artist-friendly and more sustainable. The momentum here feels unstoppable.
As one of Columbia’s finest and most famous artists once put it, you don’t need a weatherman to know which way the wind blows.
Music Business Worldwide