When Taylor Swift announced her new record deal on Monday with Universal Music Group and Republic Records, she put together the long-awaited agreement with an unusual arrangement: as part of her joint contract with the record label, UMG must promise to deliver the artists, on a not recoverable, a part of the unexpected gain of your Spotify stock in the future.
Not just Swift, but all his artists.
The warning is broad, though vague. The three record labels "Big Three", Universal, Sony and Warner, acquired shares in Spotify a few years ago, and all promised at some point that the artists would benefit if the labels sold their stake in the Swedish music transmission company. Universal, the last of the three to make such a commitment, announced in March, just before the debut of Spotify's public company on the New York Stock Exchange, that artists will "share the profits" of a stock sale. But according to sources, the Swift agreement on Monday specifies that the hypothetical sale of shares will result in payments to Universal artists regardless of the status of their account, which means they will receive money even if they are in red with the company. the advances not recovered. (Sony gave those terms to their artists when they pulled out of Spotify's shares earlier this year, but Warner refused to ignore the artists' balances, which means that much of the money that Warner gave simply returned to the label).
A source close to the subject says. Rolling Stone Swift's alignment with the approach of UMG President / CEO, Sir Lucian Grainge, on artist payments, specifically, his interest in offering Spotify equity to artists without withholding the money owed, was instrumental in the singer's decision to sign an agreement with Universal about the other stamps. While the sources declined to give financial details, citing the hypothetical nature of the matter, Swift said in his announcement that Spotify's provision implies "much better terms" than Sony and Warner offered.
"As part of my new contract with Universal Music Group, I asked that any sale of their Spotify shares result in a distribution of money for their artist, not recoverable," Swift wrote in an Instagram post. "They have generously accepted this, in what they believe will be much better terms than those previously paid by other big firms." Swift added that the Spotify provision "meant more to me than any other point of agreement" of the new contract, which also gives him the possibility that his expertise will continue to advance, and that is a sign that "we are heading towards positive change. for creators, a goal that I will never stop trying to help achieve, in any way I can ".
For Swift to use his status as one of the most influential artists in the world (that is, generating income) as a trading platform is not new: he demanded that Apple ensure that artists were rewarded during Apple's free trials Music in 2015 and they took three. One year of Spotify boycott on relatively scarce royalty payments at its free level. (In a volte-face, she restored her catalog on Spotify last summer.)
But it reinforces even more the growing trend of artists in the era driven by streaming that takes more power than before the record labels. Music lawyer Gregor Pryor said the Guardian the fact that Swift has not accounted Spotify's income against existing debts marks the type of agreement between artists and entrepreneurs that would not have been possible in previous years. "Jay-Z did it with Tidal … The artists are behaving in a way that is more geared towards improving their performance compared to what the traditional machine, of labels and editors, could be entitled to," he said.
According to the calculations of Music Business Worldwide from a financial presentation of 2008, Universal has a participation of around 3.5 percent in Spotify, which has a value of $ 1 billion according to Spotify's current valuation of around $ 28 thousand millions.