The major labels have committed to sharing Spotify equity money with artists. But what will they pay their indie label partners?

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MBW broke the news last night that Universal Music Group has, for the first time, committed to sharing any money generated by the sale of its Spotify equity with its artists.

In doing so, the company joins both Warner and Sony in making a public guarantee that its talent will share in at least some of the proceeds should Spotify’s NYSE floatation be a success.

(In the case of Sony and Warner, these payouts will be tied to existing breakage stipulations in artist contracts. Universal says it will share its Spotify money “consistent with [our] approach to artist compensation”.)

Today, leading independent labels have reiterated their commitment to the Fair Digital Deals Declaration, which was first launched in summer 2014 by the Worldwide Independent Network (WIN) – the umbrella organisation that brings together a raft of territory-specific independent music trade bodies.

But they’ve also asked a pointed question of the majors: in addition to sharing your Spotify stock proceeds with your own artists, will you be sharing it with the independent labels you distribute – and the artists signed to them?

“The independent artist community has expressed growing concern about their share of these revenues.”

In a statement, WIN said: ‘The independent artist community has expressed growing concern about their share of these revenues following the forthcoming listing and in response WIN has re-affirmed the commitments made under The Fair Digital Deals Declaration and has adopted a clear stance that amplifies its continuing adherence to fairness and transparency.’

Alison Wenham, CEO of WIN said, “The Fair Digital Deals Declaration is a voluntary initiative launched in 2014 and is a clear statement of those labels’ commitment to their artists. With the forthcoming Spotify listing, which will value the company at an estimated $19bn, they have the perfect opportunity to reiterate their position and more labels are expected to sign up over the coming weeks.

“We are fully focused on ensuring a sustainable economic relationship between the independent recorded music industry and the artists it represents.”

Martin Mills, Beggars Group Founder and Chair of WIN said: “It is entirely appropriate that independents, who have given birth to every significant new musical movement over the last 70 years, should have taken the lead in committing to fair and reasonable treatment of all artists and application of contract terms as the digital era continues to move into uncharted waters.”.


You can read the full Fair Digital Deals Declaration below.

LABELS’ FAIR DIGITAL DEALS DECLARATION

We make the following declaration in connection with the distribution of recordings in digital services.

We will:

  1. Ensure that artists’ share of download and streaming revenues is clearly explained in recording agreements and royalty statements in reasonable summary form.
  2. Account to artists a good-faith pro-rata share of any revenues and other compensation from digital services that stem from the monetization of recordings but are not attributed to specific recordings or performances.
  3. Encourage better standards of information from digital services on the usage and monetisation of music.
  4. Support artists who choose to oppose, including publicly, unauthorized uses of their music.
  5. Support the collective position of the global independent record company sector as outlined in the Global Independent Standard – see www.winformusic.org

We wholly disapprove of certain practices, which leave artists under-recompensed and under-informed in the digital marketplace and will work together with the artist community to counter these practices.

Music Business Worldwide

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