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Performer and manager groups call for bigger cut of streaming money to go to artists

By | Published on Thursday 6 March 2014


Another alliance of music business trade bodies was announced yesterday as the performer and manager communities joined together to speak out on the royalties artists receive in the digital domain, and specifically the cut of streaming revenue paid to talent by their record companies.

There are various elements to the big debate on digital royalties, most of which are explained in the most recent edition of the CMU Digest monthly report, where Business Editor Chris Cooke writes: “Most of the debate has centred on heritage artists with record contracts that pre-date iTunes, because here the question is about what record companies are legally obliged to pay their artists, rather than what they should ethically offer.¬†For artists signed since the launch of iTunes, there should be less ambiguity in record contracts with regard to digital income”.

He goes on: “And if the contract states that artists get a [low] split for digital, no court is going to interfere with that agreement. Nevertheless, some do argue that artists should be earning a bigger cut of digital money, because while labels may be taking as big a risk as ever when they sign on to launch a new artist, the workload undertaken by the label for each individual digital sale or stream is considerably less than in the physical product days”. You can now read this trends piece on the CMU website here.

In an announcement yesterday, AMP – or Artists, Managers & Performers – which is an alliance between the Musicians’ Union, the Music Managers’ Forum and the Featured Artists Coalition, confirmed it is pushing that very argument, specifically with regards streaming income, ie that labels should share the money with their artists 50/50, rather than taking the lion’s share of the loot, as is usually standard on record sales and download revenue.

Justifying that argument, MU General Secretary John Smith told CMU: “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?”

Expanding on AMP’s demands, FAC co-CEO Crispin Hunt said: “Musical artists’ royalty rates must be modernised to reflect the digital environment in which their music is now largely consumed. The FAC joins AMP in calling for artists to be accounted to with complete transparency at an equitable rate on all digital income, including advertising revenue, catalogue access fees, unrecouped advances and any other income based upon the value of the licensing of artists’ catalogue, and in any future third party deals which impact artists’ earnings. The industry must be able to sustain its investment in music, but artists and performers must also be able to sustain their investment in creativity”.

And for the management community, MMF CEO Jon Webster said: “The MMF have long campaigned for digital services to be treated differently from analogue, so we are obviously pleased to support the call for an equitable rate for artists and performers when dealing with streaming income”.

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.