Last week, Radiohead manager Brian Message called for government intervention to unseal secret, ‘NDA’ contracts between companies like Spotify and major labels like Universal Music Group. Now, that concern is spreading: here’s a statement on the matter just issued by the Featured Artists Coalition (FAC) on why secret streaming contracts suck for artists.
Streaming is becoming an increasingly important part of the music industry landscape and yet its business model and operations remain little understood within the artist community. Artists hear of big money being paid into the industry but express concern when they see apparently high numbers of streams translate to low numbers in financial terms when royalty statements arrive.
As streaming becomes a significant driver of revenue to major record labels, the commercial deals between them and streaming service providers remain shrouded in Non-Disclosure Agreements that prevent artists from knowing the full commercial backdrop against which they are supposed to get paid.
It is clear that without understanding new digital services in depth, artists cannot begin to negotiate terms effectively or try to renegotiate where labels are using legacy contracts from the physical era to cover streaming as merely a ‘format change’, often with disastrous results for artists.
In discussions on streaming, issues have become conflated such as the decline of digital sales and the rise of streaming and leave little room for positive discussion around how to drive reasonable revenues in the totally new commercial environment. The economic facts and strategies are rarely laid out let alone explored in detail.