A week ago, lawyers for the Temptations were the first to launch legal action against a major label for failure to pay through the advances they received from Spotify to have access to their catalogue of music. TMV have written about the double standards of labels numerous times. This article examines the double standards of labels but also the potential ramifications for the recorded music business if The Temptations win their legal action.
Let TMV also be very clear the non-payment of label licensing advances through to artists is not just restricted to advances from Spotify, it features across all digital music streaming and à la carte services.
The irony in respect of this current case is that an artist is bringing their label to court to answer question relating to that label effectively stealing from said artist. Yet on the flip side we continually hear from the record industry that pirates are the thieves we the general public should be worried about. Well, if you’re a genuine fan of a band TMV would suggest that as a fan you should be equally worried about the fact labels are stealing from the artists you admire.
TMV in no way condones piracy or the illegal sharing of content in any form whatsoever. However, we also equally abhor stealing from artists. Stealing is stealing folks and its time labels began practicing what they have been preaching.
Court papers released by The Temptations also outline the archaic nature of the industry. The fact labels still believe it is morally right to charge artists a packaging and returns deduction on digital downloads is clearly deluded. Please labels outline a definition of how a digital download involves packaging. TMV already know for a fact that WMG charge all digital services a substantial fee (its over £25,000 per year in the UK alone), to deliver their tracks to each digital music retail service.
So instead of incurring costs for supposed “packaging” of digital products, labels are in fact receiving fees on top of astronomical advances to deliver catalogues of their artist’s rosters music to digital music services. Subsequently TMV can see no legal case to claim a ‘packaging’ deduction from digital downloads.
The same goes for returns of stock. Please UMG (the plaintiff in The Temptations action) inform TMV firstly of a definition of a return of stock and how it relates to digital downloads. Secondly, we would also like to be presented with a demonstration of a digital return of stock in reference to your roster of artists.
Moving onto the wider ramifications for the industry in respect of The Temptations case, firstly TMV are surprised other heritage artists have not yet launched similar action to that of the Temptations. Perhaps, they are waiting for one artist to set a precedent of sorts? If The Temptations do win their case than it will send shockwaves through the recorded music business.
Since the advent of the 21st Century labels have been licensing their catalogues to numerous digital music services displaying countless different business models. The fact is no artist has ever received payment from these advances demanded by the labels to license their catalogue of artist’s music to such digital music services.
So whilst labels trade on their catalogues of artists music to leverage extortionate advances from digital music services, they do not pay the legally owed parts to the roster of artists they used to negotiate the advance in the first place. Nice if you can get away with it. Yet it gets even murkier in respect of Spotify.
First these labels trade on their roster of artists music without paying any advances through to said artists and then they also own a percentage of the service which has recently been valued at between $3.5 – $4 Billion dollars. In all between all four major labels and Merlin the independent body representing key indie labels around the world 18% of Spotify is owned by the recorded music business.
Artists continue to complain of worthless payouts from Spotify, labels win on both sides; they pay none of the advances they received from Spotify to their roster of artists and, labels get to share in the spoils of any Spotify IPO. TMV have always stated an IPO was always the exit plan for Spotify’s founders in collusion with the labels from the get go.
Where is the Featured Artist Coalition in all of this? Why can’t they put together a class action on behalf of their member artists? The launch of The Temptations legal action against UMG details a clear case for all artists. However, it is only large established artists and their associated management teams that possess the power to effect change. It is TMV’s view that they should take action to protect artist large and small both for now and the future.
So whilst, Spotify’s founders, recorded music labels and other investors all look to get a sizeable payout, what do artists get in return? Basically zero, zilch nada! As a record label, as a person in the music business or just as a music fan do you believe it is right that artists get ripped off in such a blatant manner? Please do leave us your thoughts below in the comments section.