Artists Fed Up With Low Streaming Royalties — Threaten to Sue Labels

International music artists are fed up with low streaming royalty payments, and fed up with the labels getting a bigger cut of those royalties than the artists receive. Warner and Universal Music are now facing possible lawsuits from artists unless they agree to increase the artists’ share of those royalties. While The Guardian cites example figures in British pounds, today’s currency conversion rates show that while the artist could make roughly $800 on 1 million Spotify streams, the label would make over $7,000 for those same streams. To further complicate things, some artists’ contracts pre-date the online wave and those artists’ royalty shares fall under the old model when online streams were not contemplated. In addition, music publishers are joining the fight to complain they are not paid as much as labels from the digital streaming services. (Source: The Guardian — “Spotify row: artists threaten to sue labels over music streaming)

Due to the speed of technology, many of the artists’ contracts are outdated in their terms even though the contracts themselves are still governing the relationships between artists and labels. In this digital age, it is important for artist lawyers to attempt renegotiation of these older agreements to ensure artists are sharing fairly in the income from these new technologies and services. The problem is that many labels may not be willing to renegotiate royalty terms. In addition, major label contract terms often lag behind the times even for newly-signed deals, so it is important for the artist representative to stay current on industry trends and know which terms to update in deal negotiations. Major labels have notoriously been somewhat behind the times in relation to many online and technological developments, and my prediction is that they will not be so willing to renegotiate a large number of contracts. Sure, they might change terms for some of their most important (i.e. financially successful) artists, but I doubt they would do a long list of renegotiations without an influx of lawsuits — or at least the threat of them.

Technology definitely has a way of keeping the litigators busy…

Erin M. Jacobson - Music and Entertainment Attorney, Los Angeles, CA

About Erin M. Jacobson - Music and Entertainment Attorney, Los Angeles, CA

Known as "The Music Industry Lawyer", Erin M. Jacobson represents a talented roster of musicians and music business professionals. In her Los Angeles office, Erin works directly with her clients at every career stage to protect them and their creative endeavors. In addition, she has published numerous articles and speaks regularly on music industry issues.
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