One year ago, as Americans took to the streets, risking their lives to protest the murder George Floyd by police, many corporations and institutions announced support of the Black Lives Matter movement and equal rights in general. Among those new champions of equality was Sony Music Group, which announced it had set up a $100 million fund to be distributed to organizations fighting for equal rights.
Veteran music attorney Ronald Sweeney gave Sony’s announcement a bit of a Pelosi clap, noting that Sony, its Columbia forebears and every recording company had, for years, made billions off of black talent never properly compensated. Sweeney suggested it would mean more for Sony and others to forgive legacy artists’ unrecouped debts and let them collect their due royalties.
I see spellcheck is unfamiliar with the word “unrecouped.” Spellcheck has obviously never read a recording contract.
For over a century, from Volta and Edison to Sony and BMG, the recording industry has structured contracts with artists with an eye to paying them nothing or as close to it as possible. Contracts promise performers a royalty on each record sold, but allow the companies to recoup recording costs, tour support costs, radio campaigns, the costs of record packaging and damage during shipping before ever putting out a dime in royalties owed the artist.
Vague and flexible “administrative” and “promotional” expenses could include almost anything, and artists might find themselves on the hook for lavish events that had little or nothing to do with their records.
Sweeney’s suggestion that Sony and others “zero out” the unrecouped accounts of legacy artists represented a decent first start to addressing the inequities of the industry. This past week, Sony announced it agreed. Sort of.
While Sony’s move is heralded under headlines like “Sony Music Is Wiping Out the Old Debts of Catalog Artists,” the company isn’t quite declaring a jubilee year.
Sony did not say it would “zero out” unrecouped balances, as Sweeney suggested, and the company made clear that it is not “modifying existing contracts.” However, in an effort to “creat[e] more payment opportunities for our long-standing artists… around the world,” Sony promised to clear the way for royalties to flow to some artists still in debt to the label, “pay[ing] through on existing unrecouped balances to increase the ability of those who qualify to receive more money from the uses of their music.”
Still, Sweeney announced he’s pleased at the move, and attorney Stephanie K. Hay counts the move as a good faith effort on the company’s part.
My take: meh.
Sony’s new “we’ll let you have a piece now” policy applies to artists signed before 2000, the year a mostly-unknown peer to peer mp3 sharing site called Napster was sued by the RIAA, Metallica and Dr. Dre. Napster was eventually killed, but the music “sharing” and streaming models it birthed, leading to generations of music ‘fans’ who refuse to pay for music and artists needing to hit three million spins to make $100, make Sony’s gesture little more than that.
The chart below offers a stark look at what Napster, et. al. hath wrought: a reduction of the music revenue pot by nearly two-thirds from it’s peak at century’s end.
Worse for artists, whether or not a company held back royalties for unrecouped expenses, those royalties actually added up to real money now and then. Even with deductions for (potential) breakage, (potential) returns and packaging, a recording artist could theoretically see a dollar for each LP sold, call it a dime a song (very rough numbers).
Today, most consumers do not even purchase music, but listen through streaming services, the most popular being YouTube Music, which pays artists about seven-hundredths of a penny per spin. Spotify, the second-most popular service, pays about a third of a cent.
To be clear, neither Sony nor any other major created this situation, and it’s certain they, too, wish the market had not changed so drastically.
But to (not really) forgive artists’ unrecouped debt and allow them a sip of the royalty stream twenty years after it’s been drained dry doesn’t merit much of an attaboy.
One Vor’s opinion.