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Billy Bragg enters Spotify debate: The labels are to blame

By | Published on Thursday 7 November 2013

Billy Bragg

“Stop dissing Spotify and sue your record company”. I’m paraphrasing ever so slightly, but that’s sort of the message that Billy Bragg sent out to his fellow artists via Facebook yesterday as he was gigging on the uber streaming service’s home turf in Sweden.

Which presumably means it’s the major labels that are evil, not Spotify. Which is good news, I was kind of missing that default assumption in the artist community that it’s the major record companies who are scum (well, “all major labels are evil, except mine” is the customary line for featured artists still working with one of the big players).

Bragg was basically responding to the various artists who have recently hit out at Spotify, or really the streaming service business model in general. Some – Nigel Godrich, Thom Yorke and David Byrne most vocally – reckon that the royalties paid out by these services are just too small, and if streaming is to ultimately replace both CD sales and iTunes-style downloading, then that’s a problem.

But, Bragg notes, all but a handful of indie labels (most notably Ministry Of Sound) remain supportive of Spotify et al, which suggests that, in the main, they are doing very well thank you very much from the growth in streaming music.

The issue for artists receiving tiny royalties then, Bragg argues, is that labels are not sharing enough of the loot with their acts, by applying royalty splits from the CD age, even though record companies do not have the costs or risks that were involved in manufacturing and distributing physical product in the digital domain.

Of course the digital royalties debate is not limited to streaming; many artists reckon the labels are hanging on to far too much of the money generated by download sales too. And as much previously reported, this has been a hot topic of debate in the US record industry where numerous veteran artists are suing for a bigger slice of the digital pie. And a recent report in The Guardian, cited by Bragg in his post on the issue this week, reckons that some Swedish artists may likewise soon go legal on this matter.

Though those artists going legal over digital royalties all have contracts that predate iTunes, where there is no specific mention of digital sales and how the money generated should be split (except that most record contracts do accept the principle that splits may vary for the different ways a sound recording can be monetised). That ambiguity provides opportunity for the artists, because their contracts are open to interpretation, and a judge may interpret in their favour.

But for newer artists, who most of the European pop veterans kicking Spotify of late have claimed to be standing up for, there will be no such ambiguity to play with, because more recent contracts will spell out in black and white how much of download and streaming money the artists gets and, at least for new artists signed to majors, the majority will likely go to the label. Artists with those contracts won’t be able to sue their way to more cash; all they can hope for is an industry consensus that talent should get more and an opportunity to renegotiate their original contract down the line.

But back to Bragg, who wrote on Spotify this week: “I’ve long felt that artists railing against Spotify is about as helpful to their cause as campaigning against the Sony Walkman would have been in the early 80s. Music fans are increasingly streaming their music and, as artists, we have to adapt ourselves to their behaviour, rather than try to hold the line on a particular mode of listening to music”.

“The problem with the business model for streaming is that most artists still have contracts from the analogue age, when record companies did all the heavy lifting of physical production and distribution, so only paid artists 8-15% royalties on average”.

“Those rates, carried over to the digital age, explain why artists are getting such paltry sums from Spotify. If the rates were really so bad, the rights holders – the major record companies – would be complaining. The fact that they’re continuing to sign up means they must be making good money”.

“Here in Sweden – where I’m doing a show tonight in Malmö – artists have identified that the problem lies with the major record labels rather than the streaming service and they are taking action to get royalty rates that better reflect the costs involved in digital production and distribution. UK artists would be smart to follow suit”.

So take note Thom and Nige. Though the records Yorke and Godrich pulled from Spotify in protest – the former’s solo album and the duo’s collaborative output as Atoms For Peace – are actually distributed by the Beggars Group which generally gives artists a much fairer 50/50 split on digital money. Which means even if Yorke is being screwed over by a major on the early Radiohead catalogue (now controlled by Warner), he possibly still reckons the Spotify payout is too low, even when the label forwards half the money onto the artist.

This debate, I’m sure, will continue.