Sony Music has today (June 11) released a release that the music industry will talk about in the coming years.
For some time now, influential voices in the industry have called for the uncollected balances of hereditary artists to be written off by record companies. This would see today̵
This is especially true in many cases for hereditary black artists. Last summer, during industry-wide discussions around Blackout Tuesday, US veteran artist manager and lawyer Ron Sweeney called on the major record companies to implement a range of new policies in a strong up / ed for MBW. Sweeney wrote, “As for black artists who signed to you before 2000, who are no longer signed to your companies, reset their uncollected royalty balances and let their royalties flow to them so they can support themselves.”
Many in the music industry never thought we would see a day when a major record label openly embraced such a plan. These people were wrong.
In a letter sent to thousands of artists today and obtained by MBW, Sony Music Entertainment (SME) has announced the launch of a new initiative called “Artists Forward”, which it says focuses on “prioritizing transparency with creators in all aspects of their development ”.
SME’s milestone new policy under “Artists Forward” is called the Legacy Unrecouped Balance Program. The letter confirms: “As part of our continued focus on developing new financial opportunities for creators, we no longer apply existing non-recovered balances to artist and participant earnings generated January 1, 2021 or later for qualified artists and participants globally who signed SMEs prior to the year 2000 and have not received an advance from 2000 onwards.
“Through this program, we do not change existing contracts, but choose to pay on existing non-recovered balances to increase the opportunity for those who qualify to receive more money using their music.”
“As part of our continued focus on developing new financial opportunities for creators, we no longer apply existing non-recovered balances to artist and participant earnings generated on or after January 1, 2021 for qualified artists and participants globally.”
Sony Music Letter to Artists, June 11th
What all this means in practice: Sony effectively writes off / ignores unearned balances going forward for qualifying artists.
The main reason why the balances technically remain on Sony’s ledger, we understand, is if an artist has refund rights attached to the refund. To track when reversal will occur in these cases, the SME monitors when the qualifying artist would have gotten back if the firm had not been through royalties.
But the bottom line here: If an artist who last received an advance from Sony Music before 2000 is not repaid today, they will now start seeing streaming and other royalty income land on their bank account regularly … including money that is dated back to January 1 this year.
The good news for those who have signed historic deals with Sony Music does not end there either.
Sony’s letter outlining the Legacy Unrecouped Balance program confirms that the new policy will apply to both “artists and participants” who meet the eligibility criteria. MBW has confirmed that “participants” in this case will also include manufacturers, JV partners and distributed labels that have previously had direct agreements with SMEs.
Sony says that artists and participants who qualify for the Legacy Unrecouped Balance Program will be notified of their eligibility individually in the coming weeks.
Sony Music insiders tell MBW that the Legacy Unrecouped Balance program is a continuation of Sony Music Group CEO Rob Stringer’s determination to “do the right thing” when it comes to major league decisions regarding his company’s relationship with artists.
It comes three years after Sony Music memorably rejected unrecovered artist balances when distributing profits reaped from its $ 768 million sale in Spotify shares.
The surprising move was in contrast to Warner Music Group, which in the wake of redeeming its $ 504 million Spotify stake allocated the stake it shared with artists (25%) against individual unrecovered balances.
Instead, Sony made sure that every penny of the $ 768 million it shared with artists (over $ 250 million, all told) was paid to artists as opposed to staying within the corporate coffers.
Meanwhile, Sony Music has also told qualifying artists (both legacy and non-legacy) today that they can now receive advances on expected earnings through a new feature called Real Time Advances, available through the Sony Music Artist Portal. This feature is currently available in the US and UK and will be rolled out in additional markets later this year.
Qualifying artists and “participants” can already use the Sony Music Artist Portal to request a recall of all or part of their outstanding balance each month as soon as it becomes available using SME’s Cash Out feature launched last year .
In its “Artists Forward” letter today, Sony Music writes: “We are driven by our mission to provide artists with the best levels of service. The program we are announcing today is part of the ongoing work and builds on our initiatives. and investments in modernized contracts, flexible contract options, advanced data and analytical insights for creators and more. ”
At least one leading independent label group in the music industry has taken the lead in wiping out unrestricted balances for cultural heritage artists.
Beggars Group, which is home to XL, 4AD, Matador and others, has for some time deleted all non-recovered credit in advance 15 years after the company’s “active relationship” with an artist ends – ie. after the last registration of an agreed contract is released.
In 2016, Beggar’s co-founder and chairman, Martin Mills, challenged the major brands to emulate this policy 20 years after their own “active relationship” with each artist ended.
Today, Sony Music faced that challenge.Music company all over the world