Artists who signed to the record label of Sony Music before the year 2000. have been relieved of their huge debts. It means that many will now, for the first time, earn money when their songs are streamed on services like Spotify and Amazon Music.
Source said that the eligible acts would “include household names”. It said some artists stood to receive “many thousands of dollars per year”.
Why are recording artists in debt in the first place?
Musicians typically take on debt when they first sign to a record label to pay for recording studios, video shoots, distribution and other expenses. The money is then paid back when they sell their music. However, many artists never earn enough to repay their advances, often because they get unfavourable royalty rates from their own record companies.
And until the debt to their label is repaid, those artists are not eligible to receive income from streaming, and other royalty payments.
What has Sony said?
“We are not modifying existing contracts, but choosing to pay through on existing unrecouped balances to increase the ability of those who qualify to receive more money from uses of their music,” said Sony.
In other words, the debt hasn’t been explicitly wiped out, but Sony will ignore it and pay royalties to affected acts, backdated to 1 January 2021.
“Many of the record deals [made] before 2000 didn’t recognise that streaming platforms would ever exist. Therefore, artists didn’t have the right mechanisms in place to see those revenues,” said music industry lawyer Aurelia Butler-Ball
