Sony Music says it will be waiving off the debts of thousands of artistes who signed to the company before the year 2000.
This implies that the American global music company will be paying royalties from streaming and other revenue streams to the artistes who signed deals with the label before 2000 and have yet to recoup their advances.
Musicians typically accrue debts when they first sign to a label that gives them a lump sum known as an advance to pay for studios, video shoots, distribution, and other expenses. The money is paid back when they sell their music.
Some musicians, however, never earn enough to repay their advances often due to unfavourable rates from record companies. Hence, until the debt is repaid, they’re are not eligible to streaming income and other royalty payments as due.
According to BBC, Sony Music, in a letter to artistes on Friday, said it was waiving the debts amid pressure on the record industry to be more transparent about the way it distributes money, particularly from streaming services.
Although the debt hasn’t been explicitly wiped out, the music firm plans to ignore it and pay royalties to affected acts, backdated to 1 January 2021.
This also implies that many artistes will now earn when their songs are streamed on services like Spotify and Amazon Music.
“We are not modifying existing contracts, but choosing to pay through on existing unrecouped balances to increase the ability of those who qualify to receive more money from uses of their music,” the label was quoted as saying.
Aurelia Butler-Ball, a music industry lawyer, was also quoted as adding that the scheme would “unlock” streaming revenues that artistes were not previously entitled to, under contracts signed during the CD and cassette era.
“Many of the record deals [made] before 2000 didn’t recognise that streaming platforms would ever exist,” she said.
“Therefore, artists didn’t have the right mechanisms in place to see those revenues.”
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