BASCA criticise secrecy behind digital deals

By | Published on Wednesday 7 April 2010

The British Academy For Songwriters, Composers And Authors has hit out at the secrecy that surrounds the deals between the likes of Spotify and the record labels and collecting societies.

The Academy says that confidentiality clauses in such deals means their members are left in the dark regarding the earning potential that Spotify-style services offer for songwriters. They also fear that the rapid growth of Spotify-style services will make consumer think musicians and songwriters are now earning good money from digital when, actually, they could well be making very little cash from having their songs on streaming platforms.

BASCA make the comments in an editorial in a members’ email briefing, which notes that a recent Q&A session with Spotify UK chief Paul Brown had not answered many of their questions about the royalties being generated by the streaming music service, because he was tied by confidentiality clauses in his company’s contracts with record companies and the likes of PRS.

The editorial notes: “Any company working at the cutting edge has to go through difficult developmental stages; we understand that, and acknowledge that the business needs time to grow, but we would urge all concerned to engage now in a full and frank discussion of the issues. BASCA believes that until there is transparency around commercial deals, the evolution of the online music industry will be bogged down and mired by vested interests and will struggle to achieve its true value for both creators and users”.

On Spotify in particular, it adds: “Spotify carries ten million tracks and operates in six European territories with a client base of seven million. The service operates on the basis that repertoire has been licensed through record companies and collecting societies and declares itself ‘a compelling alternative to piracy’. To copyright owners, it says boldly, ‘you earn a royalty when your music is played’. To Spotify, BASCA says, ‘How much?'”
Putting some of the blame on the major record companies, who are most secretive when it comes to digital deals, they continue: “Let’s not forget that it is a matter of fact that the four major record companies all have an investment interest in Spotify. They therefore stand to benefit to an even greater degree from the revenue and licensing model which appears to be the basis of the entire Spotify operation. Their unwillingness to divulge the extent of their commercial interest, or the terms of their agreements, can only lead to suspicion and a feeling that the industry is looking to line its own pockets before returning a fair share back to the songwriters and composers”.