News - 08/04/2014

Beggars Group to revise its 50/50 policy on streaming revenues

Beggars Group to revise its 50/50 policy on streaming revenues

At last night's MusicTank event on music streaming Simon Wheeler, Director of Strategy at the Beggars Group, announced that the independent label is going to revise its 50/50 policy on streaming royalties splits.

Wheeler had announced the decision to go 50/50 with artists on streaming two years ago at another MusicTank in spite of their contractual obligations being much lower. Last night he said: ”We thought it was important to make those royalties significant to our artists, but we’ve been always clear that we would have to review that if streaming took off.”..."All of the costs that the label incurs; A&R, marketing, distribution need to be covered from the sales income and as the streaming income grows that needs to bear a share of the costs. We’re going to be moving away in the following months from the 50% royalty model to somewhere between the normal royalty rate and 50%. It’s a big statement but recent changes require this as streaming is 40% of Beggar’s global digital revenues.”

Later in the evening, Billy Bragg asked Wheeler to explain the move in more detail from a commercial standpoint, wondering whether there is no economy of scale involved making it more feasible to pay 50% as streaming incomes increase.

Wheeler responded: “Say that the royalty rate is 20% and that we were paying 15% of gross to Artists, if our company’s margin is for the sake of argument 20% and we’re going from paying a 20% to 50% royalty rate to artists across the board we would end up losing money. This of course is based on the assumption that streaming will eventually take over as the main revenue stream." This is obviously a big development in the streaming space as more artists are campaigning for a 50/50 split on streaming royalties.

The fact that a label that is historically artist-friendly is viewing this split as unsustainable for their business in the long term is a strong signal that the 50/50 split may not be a realistic objective for the Artist community.

(Andrea Leonelli)

© 2024 All rights reserved. Rockol.com S.r.l. Website image policy

Rockol

  • Rockol only uses images and photos made available for promotional purposes (“for press use”) by record companies, artist managements and p.r. agencies.
  • Said images are used to exert a right to report and a finality of the criticism, in a degraded mode compliant to copyright laws, and exclusively inclosed in our own informative content.
  • Only non-exclusive images addressed to newspaper use and, in general, copyright-free are accepted.
  • Live photos are published when licensed by photographers whose copyright is quoted.
  • Rockol is available to pay the right holder a fair fee should a published image’s author be unknown at the time of publishing.

Feedback

Please immediately report the presence of images possibly not compliant with the above cases so as to quickly verify an improper use: where confirmed, we would immediately proceed to their removal.