The UK-based Featured Artists Coalition (FAC) has criticised Sony for its claim that it does not need to distribute revenue to artists accrued from its stake in Spotify.
An ongoing US court case has seen 19 Entertainment claim that Sony’s 6% stake in Spotify means it has “significant power to exert control over Spotify in order to not only dictate how revenue will be paid, but wrongfully and in bad faith divert money from royalties that must be shared to other forms of revenue that they can keep for themselves.”
Sony has responded by stating that it isn’t required “to structure its affairs in whatever way yields the greatest royalties for 19”.
19 alleges that money from the Spotify stake, as well as piracy settlements and advertising kick-backs from streaming services should have made its way back to artists.
The FAC has now responded to the details of the case. You can read the full statement below:
“Sony has just defended the leaked deal it did with Spotify in court in the United States by stating that it had no obligation to make sure its deals with digital platforms protected value for artists.
“Artists sign deals with labels that are balanced between advances and royalties, which artists understandably always thought protected their long term future, given that they assign valuable rights as part of these deals.
“Yet the leak of Sony’s position on artists rights when deals are struck with digital service providers proves our long held fear. Artists’ royalties have clearly been rendered all but value-less by the deals the major record labels have done with digital providers including music streaming services such as Spotify.
“It would appear that in this instance, Sony chose to ignore artists’ interests in favour of their own corporate ones. It’s extraordinary that Sony is prepared to defend their conduct in court by saying they believe it is their legal right to do so. Without the artists, labels would be nothing.
“In the meantime, the FAC welcomes the arrival of the Berklee Report – “Fair Music: Transparency and Payment Flows in the Music Industry”. The report looks at whether compensatory structures are fair and makes recommendations in order to reduce friction between various parties.
“These recommendations centre on the development of a ‘Creators Bill of Rights’ which would not only allow, but entitle creators to be fairly compensated, given up-to-date reporting and to be informed of the entire payment stream for his or her works including rates and deductions. Additionally, the report stipulates that a “fair music” certification of transparency be administered to digital services and labels.
“Whatever the legal rights or wrongs in Sony’s case, the breach of moral trust that has long been felt amongst artists is now in the public domain and on the record.
“If the labels won’t come together with artists to fix the problem, perhaps legislators will.
“Without solutions, the future of the music industry hangs in the balance as artists cannot make a living out of scotch mist, lining the coffers of record labels who appear not to care about the very hand that feeds them.”Music Business Worldwide