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Sony confirms it will pay out royalties on unrecouped publishing deals as well

By Chris Cooke | Published on Wednesday 21 July 2021

Sony Music has extended its recent new policy regarding unrecouped balances from its recordings business to its publishing business. It means that songwriters who signed to the major prior to 2000 and who have never recouped their original advances will now earn royalties from the exploitation of their songs.

Sony announced that it was applying that policy on the recordings side of its business last month. It means that artists who signed their deals with a Sony label in the 20th century will now earn royalties whenever their music is streamed, even if they never fully paid back any advances they received and other recoupable costs that were incurred by the label prior to 2000.

That many artists are still paying off recoupable balances decades after a record has been released came up during the recent Parliamentary inquiry into the economics of streaming, because it means that a heritage artist whose catalogue has been revitalised by streaming may not be receiving any new payments, because the royalties they are due are paying off old debts.

Some indies, like the Beggars Group, already write off unrecouped balances after a period of time. Other labels, including the majors, were encouraged to follow suit during Parliament’s inquiry, with some pointing out that – because conventional record contracts only pay an artist a minority share of any money generated by their recordings – it is common for a label to go into profit on a deal long before the artist recoups any advance and recoupable costs.

Publishing deals are generally much more generous to songwriters than record deals are to artists, with the writer getting a majority of any monies generated by their songs, making it easier to pay off advances. Though at least 50% of any money generated by the performing rights in a song is actually paid directly to a songwriter via the collective licensing system, even when there is an advance to be recouped. In the short-term that’s obviously to the writer’s benefit, though it does mean it takes longer for advances to be recouped.

It’s also worth noting that publishing deals in the 20th century – although still more generous to songwriters than record deals were to artists – were not as writer-friendly as modern publishing deals.

Over the years the share of the money allocated to songwriters on the average deal has gone up – plus life-of-copyright deals, via which a publisher has control over a writer’s songs for as long as the copyright in them exists, have pretty much disappeared, certainly in Anglo-American markets. This means a publisher will now only have control over a writer’s songs for a set time period.

But for writers who signed life-of-copyright deals in the 20th century that paid lower songwriter royalties, this latest move by Sony could result in new monies flowing in each year. The new policy will also be applied retrospectively to the start of 2021.

Announcing the new policy to songwriters yesterday, Sony Music Publishing boss Jon Platt wrote in a memo: “Today, I am pleased to share that we are launching Songwriters Forward, an initiative designed to expand our support of careers at every stage. Under Songwriters Forward, we are introducing the Legacy Unrecouped Balance Program to qualifying Sony Music Publishing songwriters. We have been working for some time to develop this plan, which complements Sony Music’s recently announced Artists Forward”.

“We will no longer apply existing unrecouped balances to earnings for eligible songwriters signed prior to the year 2000 who have not received advances since, and this applies retroactively to 1 Jan 2021”, he then explained. “Qualifying songwriters will be notified separately in the coming weeks”.

Name-checking other recent Sony Music Publishing innovations around royalty reporting and payments, he went on: “These efforts are a continuation of our songwriter-first approach and accompany our ongoing investment in administration modernisation, including new SCORE data and analytics upgrades, Cash Out payment options, and real-time foreign royalty processing”.

“With historic policy changes across our business, we are taking important steps toward creating a more equitable, transparent music industry for songwriters and all creators. On behalf of our teams around the world, it is our privilege to represent you as we begin this next chapter with Songwriters Forward”.