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International Artist Organisation responds to Sony/Spotify contract leak

By | Published on Tuesday 26 May 2015


Following the previously reported open letter from the International Music Managers Forum responding to last week’s Sony/Spotify contract leak, the recently formed International Artist Organisation – which brings together groups like the UK’s Featured Artist Coalition – has also published a letter in response to what we learned about Sony Music’s deal with the market-leading streaming service.

As with the IMMF letter, the IAO’s correspondence is aimed at policymakers, and specifically European Union officials with responsibility for copyright and competition law. The letter, from IAO President (and also FAC CEO) Paul Pacifico, says that the Sony/Spotify contract leak “is a turning point for artists that cannot be underestimated” and that “the content of this contract suggests why non-disclosure clauses have been defended so fiercely”.

Artists and their managers have, of course, long criticised the secrecy that surrounds the deals done between record companies and streaming platforms, arguing that it makes it all but impossible for creators, performers and their representatives to assess whether they – as beneficiaries of the copyrights the labels control and the DSPs exploit – are receiving a fair share of the booming streaming revenue stream.

With multi-million dollar advances a key part of the contract leaked last week, raising the question of what happens if advances exceed the Spotify monies the label is actually due in any one time period, the letter says: “Sony have apparently stated that they have a policy of sharing [unallocated] advances [with artists] voluntarily, which we would of course applaud and we know that Warner have made this claim in the past. If we could see the basis on which any such calculations were made and compare these with results that would be a good start, but we can’t as until this moment, none of this information has been available to artists”.

As with the IMMF last week, the IAO uses the contract leak as an opportunity to make a number of requests of European policy makers. These are as follows…

1. The IAO is part of the Fair Internet Coalition which represents some 500,000 performers from across both audio and audio-visual sectors in Europe. We have been calling for EU legislators to enact a change to the ‘making available right’ which would give artists a fairer share of revenue derived from streaming with some paid direct via their collective management organisation. This would also give performers some transparency and insight into the cashflow around their work.

2. The IAO calls on the labels to come to the table to develop a code of practise, with strict penalties for transgressors, that should govern all contracts between artists and record labels and which should provide a framework to better align their interests and foster relationships of partnership. For example the market would work far better with long licenses of copyrights replacing assignment, as is already the case in Germany.

3. The IAO would like to propose that the Commission instate us as an official witness to any anti-trust investigations into the digital market and relationships between producers and platforms to provide evidence of practices that abuse the dominant position of the major labels and distort the market against the interests of both consumers and artists.

Artist and management groups are already shouting loud as the European Union reviews its copyright framework. Whether last week’s contract leak really impacts on that review is debatable – most of what was in the agreement we already kind of knew was happening – but it certainly provides a useful jumping-off point for the performers and creators who are seeking greater representation in this copyright review than ever before.

You can read the IAO letter in full here.