Major labels agree to better streaming deal for US artists

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The major record companies have agreed a new deal with a powerful artist body in the US, whose members will now receive more benefits – and very possibly more cash – from label streaming royalties.

SAG-AFTRA represents around 160,000 members, including DJs and recording artists in addition to actors, announcers, broadcast journalists, dancers, news writers, TV presenters and voiceover artists.

The body’s members have just voted to ratify a new National Code of Fair Practice for Sound Recordings (Sound Recordings Code) for online streaming and non-permanent digital downloads.

This covers money generated for performers outside the US, with particular allowances for label contributions to artists’ Health and Retirement (H&R) savings.

The deal has been agreed with members of the record industry including Sony Music Entertainment, affiliates of Warner Music Group, Universal Music Group, Capitol Records LLC and Hollywood Records Inc.

The benefits of the new contract for the artists include:

  •  ‘Groundbreaking’ inclusion in payment formulas of label revenue generated from worldwide exploitation of member work in online streaming services and as non-permanent digital downloads;
  • For the first time, payment of AFTRA Health and Retirement (H&R) contributions on a portion of domestic and foreign streaming payments;
  • Substantial restructuring of the compensation system for licensing of sound recordings, streamlining and making licensing more effective for the industry, while generating more revenue for performers;
  • Overall increase to minimums of 2% each year of the contract; and
  • Improvement to H&R contributions, including:
  • – Increase of 0.25% in the basic H&R contribution rate effective Jan. 1, 2017;
  • – 12.5% increase in the cap on H&R contributions for groups of three or more performers; and
  • – Substantial increase in cap on label payment for roster artist health insurance eligibility.

Negotiations with the labels began last year and continued for several months in Los Angeles and New York.

SAG-AFTRA’s 15-member negotiating committee was chaired by guitarist and voice actor Dan Navarro and Jon Joyce. Janice Pendarvis and Pat Alger served as vice chairs.

The labels’ lead negotiators were Bernard Plum and Michael Lebowich of Proskauer Rose LLP.

“I commend Dan Navarro and our entire negotiating team for their hard work on this agreement,” said SAG-AFTRA President Ken Howard.

“As technology changes the industry, it is imperative that our contracts change with the times and always put members’ best interests first and foremost.”

“I am proud of the gains we achieved in this groundbreaking contract and I’m pleased that the voting members agree,” said Navarro, SAG-AFTRA’s national vice president, recording artists.

“This is a big win for our recording artist members; it is truly a contract for the 21st century.”

The news comes a month after another artist rights group, The American Federation of Musicians (AFM), sued the majors for underpayment of an agreed pension fund.

This alleged underpayment, like the SAG-AFTA deal, primarily related to money from streaming services generated outside of the US.

The SAG-AFTRA National Code of Fair Practice for Sound Recordings covers session singers, royalty artists, announcers, actors, comedians, narrators and sound effects artists who work on recordings in all new and traditional media and all music formats, as well as audiobooks, comedy albums and cast albums.

The agreement covers work for the major record labels and sub-labels, as well as signatory independent record labels.Music Business Worldwide

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