WMG And Sony Music Promise Artists Will Benefit From Their Ownership In Streaming Services
February 5, 2016 at 4:38 AM (PT)
WARNER MUSIC GROUP said THURSDAY (2/4) it would include artists in any cash windfall the record label might get from the ownership stakes it holds in streaming services like SPOTIFY in the event those businesses go public or are sold. Shortly after the WMG announcement, SONY MUSIC said it would make the same promise.
BLOOMBERG reports, "The gestures of goodwill from major record labels point to a wider shift in the music industry to make the economics of streaming a bit more friendly for performers and songwriters. WARNER saw the offer as a chance to get ahead of other major record labels on a hot-button issue. STEPHEN COOPER, WARNER’s chief executive, gets to pitch his shop as a friendly place for musicians to sign."
"We strongly believe that aligning our interest with those of our artists is not only good for our artists, but also good for us and at helping the music industry,” COOPER told investors.
BLOOMBERG notes, "It’s not surprising that WARNER was the first major label to address the equity issue. Because it’s smaller than SONY MUSIC and UNIVERSAL MUSIC GROUP, the label has had to adopt a scrappier approach to digital music. WARNER led its peers in signing licensing agreements with new streaming services like SOUNDCLOUD. It was also one of the first to give artists a cut of breakage, the money that streaming services pay labels that isn’t assigned to a specific stream. SONY's decision to issue a statement saying it was on board as well shows the growing pressure the labels are facing to appear artist-friendly. 'It's part of a larger shift that's happened in the last year and a half towards more transparency and fair compensation to creators', said ALLEN BARGFREDE, the Executive Director of the RETHINK MUSIC PROJECT at BERKLEE COLLEGE OF MUSIC."