Warner Music Group have announced that they will share any money made from equity in digital music services with their artists.
The news comes after a quarterly earnings call with Warner Music Group (WMG)’s CEO Stephen Cooper. Warner have a stake in many of the leading digital music platform including Spotify, the biggest streaming service in the world, and SoundCloud.
Currently these equity stakes are in shares for the companies but now if Warner were to cash out their shares they say artists signed to any WMG labels will get a share of the profit. This is on top of existing benefits for Warner artists which include ‘digital breakage’ revenues – advance payments, minimum guarantees, and non-recoupable payments.
You can read WMG CEO Stephen Coopers full statement below:
Streaming is on a trajectory to become our primary source of revenue. As there is an ongoing debate in the media regarding how artists should be paid for use of their music on streaming services, we wanted to take the opportunity to address this issue head on. While the main form of compensation we receive from streaming services is revenue based on actual streams, there are some services from which we receive additional forms of compensation.
First there is compensation that is commonly referred to as ‘breakage’ – which includes advances, minimum guarantees, non-recoupable payments and audit settlements. We are proud to have been recognised as the first major [label] to implement a breakage policy, sharing this revenue with our artists since October 2009.
Second there are equity stakes in some streaming services for which we have not paid. Although none of these equity stakes have been monetised since we implemented our breakage policy, today we are confirming that, in the event that we do receive cash proceeds from the sale of these equity stakes, we will also share this revenue with our artists on the same basis that we share revenue from actual usage and digital breakage.
This policy stems from our desire to build deep and lasting partnerships with our artists. We strongly believe that aligning our interests with those of our artists is not only good for our artists, but also good for us and the health of the music industry.