Ahead of Sony Corp.’s April sale of half of its stake in Spotify, Sony Music Entertainment (SME) sent an email to independent labels declaring its commitment to share a percentage of the profits with eligible artists and participants as soon as possible.
Now, they’re over-delivering on that promise and sending this detailed letter to all of its signed artists, sub-labels, and other partners.
The payment from Spotify net proceeds will be made without recovery of outstanding advances and any other recoupable sums. “We hope that this is perceived as a gesture of goodwill to our music creators,” SME said in the email, which was obtained by Billboard, from SME Canada.
Sony’s sale of half of its 5.707 percent stake in Spotify was expected to earn the company around $761 mn. Ahead of the sale, the company announced it would share the money with its acts and indie labels. Thursday’s email gives some detail as to how Sony will derive payments to nearly 100,000 eligible artists and participants across almost 2 million unique titles.
According to the letter, the company will utilize a distribution method which gives equal weight to both overall revenue for Sony Music Entertainment and its portion of Spotify revenue during the period of ownership, after which SME will share said net proceeds with eligible participants. In addition, the payouts will not be subject to recoupment.
In May, Warner Music Group sold 75 percent of its Spotify holdings for $400 mn and also said it would share proceeds with artists and distributed labels, if their contracts called for it. Universal Music Group has not sold any of its Spotify shares.