Many musicians argue that not only do streaming companies not pay enough either to songwriters or to recording artists (or more usually to music publishers or collection societies and record labels), record labels in particular pay over only a meagre share of those revenues they do actually get, based on the old style 'per unit' sales from the physical era. Many heritage acts are tacking their labels to court to get a bigger share of the pie.
Now Beggars Group digital chief Simon Wheeler has told the latest MusicTank event that the independent music firm was now reviewing the cut of streaming income it passes on to its artists at a session that featured Billy Bragg whose focus is not so much what royalties the streaming services are paying to the labels, but again on how much of that money the record companies are passing on to artists. Bragg argues that with the costs and risks associated with digital content much less than when pressing and distributing physical product, labels should be paying a higher cut of that income to the artist - and like others argues for a 50/50 spilt of this income between label and artist. The major labels have (juding from the law suits) seemingly been paying a much lower artist royalty on digital income, certainly for downloads, and often for streams too, sometimes opting for the same revenue cut as with physical record sales.
 |
| Simon Wheeler |
Beggars seemed to stand out as a 'fair' label and opted for the 50/50 split, but Wheeler confirmed that that policy was now up for review. "As I said at that MusicTank event two years ago .... as a company we felt that as the streaming music market first emerged it was appropriate to share this new income stream with our artists on a 50/50 basis. But we were always clear that if and when streaming became a significant part of our overall business, that was something we would have to review". Streaming now accounts for 40% of the company's overall global digital income and the company is looking to reduce the artist's share. Wheeler confirmed adding "The costs of running the company need to be covered by sales income, and the streaming revenue stream now needs to bear its share of those costs. So we will be reviewing our policy on what split of streaming income we pass onto the artist. That rate, once decided, will likely be applied to all existing contracts, and all new contracts moving forward. I can't say what rate we will decide on, though we will seek the best possible rate for artists that also enables us to provide the kind of global resources our artists require".
The newly formed Artists, Mangers & Performers coalition - AMP - an alliance between the Musicians' Union, the Music Managers' Forum and the Featured Artists Coalition, has confirmed that it is pushing for all streaming income from the digital sphere to be shared by labels with their artists on a 50/50, rather than paid over on standard terms for manufactured record sales and download revenue. Justifying that argument, MU General Secretary John Smith said "It is no longer necessary for a record company to pay to manufacture, store and distribute physical product. In the pre-digital era, artists understood that these costs went some way to justifying the low royalty rate. There are none of these costs associated with streaming, so why are the labels paying a royalty based on a physical sale?" AMP has been mainly formed so that the MU, FAC and MMF can present a united front on royalty issues in the European Commission's latest review of the EU Copyright Directive, the public consultation for which has just reached its conclusion. The three trade groups have submitted a joint statement on the digital income debate to European officials.
Survivor are the latest band to go legal over the payment of royalties for downloads, mainly in relation to their 1982 'Rocky III' soundtrack epic hit 'Eye Of The Tiger'. Founding Survivor members Jim Peterik and Frankie Sullivan, the latter still performing with the band, have sued Sony Music for a 'licensing' cut of the revenue generated by their recordings, which they say should be 50% of the income. The lawsuit also claims that the major still owes the duo money stemming from settlements the American record industry reached with the big file-sharing platforms of old like Kazaa, and also alleges a number if other accounting irregularities including improper deductions. According to Billboard: "A Sony representative threatened that in the event Survivor persisted in its objection, Sony would exercise what it termed 'the nuclear option' - removal of the Survivor masters from the songs licensed to iTunes for download by consumers, thereby wiping out that revenue stream altogether. By threatening 'the nuclear option', Sony has conceded that its transaction with iTunes is a license subject to termination, and not a sale of the Survivor masters to iTunes. If it was a sale, Sony would have no right to demand return of the songs".
--
Both American rocker Eddie Money and the Doobie Brothers have reached out of court settlements with their record labels, Sony Music and Warners respectively, regarding the payment of royalties on digital revenues. The cases were two of the many that US heritage artists have brought against all of the majors following the landmark ruling in the case between FBT Productions and Universal Music over whether download money should be treated as record sales or licensing income - artists usually get a much bigger cut of the latter than the former.
Boz Scaggs and REO Speedwagon have joined the ever growing list of artistes, many well established, who have filed digital royalty lawsuits against the major bales for a bigger cut of digital revenue. The defendant in both suits is Sony. FBT Productions have already won a court case against Universal to get a bigger share of digital royalties from 'Eminen' recordings they worked on, and Cheap Trick, the Allman Brothers and a number of other artistes have settled a case with Sony. Cases from Rob Zombie, Whitesnake, Toto, Weird Al janKovic, Dixie Chicks, Chuck D, George Clinton, Peter Frampton, Sister Sledge, Rick James's estate, Kenny Rogers and James Taylor are pending.
