Sony Music today (June 11) made a statement that the music business will talk about in the coming years.
For some time now, influential voices in the industry have been calling for the unrestored balances of heritage artists to be written off by record companies. This would cause modern royalty profits from these acts to be paid into their pockets, rather than being swallowed up by a record company with which they may have closed deals decades ago.
This is especially true, in many cases, for the heirs of black artists. Last summer, during discussions in the industry around Blackout Tuesday, veteran American artist manager and lawyer Ron Sweeney called on major record companies to implement a number of new policies in a strong operation for MBW. Sweeney writes, “For black artists who signed with you before 2000, who are no longer signed to your companies, reset your unrecovered balances and let royalties flow to them so they can survive.”
Many in the music industry never imagined that we would see a day when a large record company would openly accept such a plan. These people were wrong.
In a letter sent to thousands of artists today and received by MBW, Sony Music Entertainment (SME) announced the launch of a new initiative called “Artists Forward”, which says it focuses on “prioritizing transparency with artists in all aspects of their development ”.
The main new SME policy under Performers Forward is called the Inherited Balance Sheet Program. The letter confirms: “As part of our ongoing focus on developing new financial opportunities for creators, we will no longer apply existing unrecovered balances to artists and entrants generated on or after 1 January 2021 for eligible performers and entrants. worldwide, SMEs signed before 2000 and did not receive an advance from 2000 onwards.
“Through this program, we do not modify existing contracts, but choose to pay on existing non-recovered balances to increase the ability of those who qualify to receive more money from using their music.”
“As part of our ongoing focus on developing new financial opportunities for creators, we will no longer apply existing unrecovered balances to the revenue of artists and participants generated on or after 1 January 2021 as eligible performers and participants worldwide.”
Sony Music letter to artists, June 11
What it all means in practice: Sony effectively writes off / ignores unrecovered balances for qualified contractors.
The main reason why the balances will technically remain in Sony’s ledger, we understand, is if the contractor has reversal rights related to the refund. To track when reversal will occur in these cases, the SME will monitor when the qualified contractor would have received compensation if the company had not gone through royalties.
The bottom line here: If an artist who last received an advance from Sony Music before 2000 doesn’t redeem himself today, they will now begin to see streaming and other royalties landing in their bank account on a regular … including cash with a return date on January 1 this year
The good news for those who have signed historic deals with Sony Music also doesn’t end there.
Sony’s letter describing the Legacy Unrecouped Balance Program confirms that the new policy will apply to both “artists and participants” who meet the eligibility criteria. MBW confirmed that the “participants” in this case will also include manufacturers, JV partners and distributed labels that have entered into direct transactions with SMEs in the past.
Sony says that performers and entrants who qualify for the Legacy Unrecovered Balance Program will be notified individually of their eligibility in the coming weeks.
Sony Music insiders tell MBW that the Legacy Unrecouped Balance program is a continuation of Sony Music Group boss Rob Stringer’s determination to “do the right thing” when it comes to major league decisions regarding his company’s relationship with artists. .
This comes three years after Sony Music ended the memorable balance sheets of unrestrained performers in distributing profits from the sale of $ 768 million in shares of Spotify.
This surprise move was in contrast to Warner Music Group, which, after cashing in its $ 504 million stake in Spotify, split the share it shares with artists (25%) against individual unpaid balances.
Instead, Sony ensures that every penny of the $ 768 million share it shared with artists (over $ 250 million, all said) was paid to artists instead of staying within the company’s coffers.
Meanwhile, Sony Music also told skilled artists (both hereditary and non-hereditary) today that they can now receive advances in projected revenue through a new feature called Real Time Advances, available through the Sony Music Artist portal. This feature is currently available in the US and the UK and will be released in additional markets later this year.
Qualifying artists and “participants” can now use the Sony Music Artist Portal to request the withdrawal of all or part of their due balance each month as soon as it becomes available using the SME payout feature launched last year.
In today’s letter “Artists Forward” Sony Music writes: “We are guided by our mission to provide artists with the best levels of service. The program we are announcing today is part of this ongoing work and further builds on our initiatives and investments in modernized contracts, flexible transaction options, advanced data information and analysis for creators, and more. “
At least one leading independent group of labels in the music business is a leader in erasing unrecovered balances for heritage performers.
Beggars Group, home of XL, 4AD, Matador and others, for some time erases all non-performing loans with advances 15 years after the end of the “active relationship” of the company with an artist – ie. after the publication of the last record of a contract.
In 2016, Beggars co-founder and chairman Martin Mills challenged major labels to emulate this policy, 20 years after their own “active relationship” with each artist ended.
Today, Sony Music met this challenge.Music Business Worldwide