Four Tet vs Domino Recordings has reached a conclusion.
The electronic music pioneer had taken legal action against his former label over streaming royalties - a case that looked as if it might set a precedent for the wider industry.
The case has now been settled with Four Tet securing his demand for a 50% royalties rate for streaming and downloads on repertoire covered by an historic contract. He has also been reimbursed for the underpayment of £56,921 plus interest. The terms of the settlement have been publicly disclosed.
In a statement on social media, Four Tet said: "I have a bodacious update on my case with Domino. They have recognised my original claim, that I should be paid a 50% royalty on streaming and downloads, and that they should be treated as a licence rather than the same as a CD or vinyl sale.
"It has been a difficult and stressful experience to work my way through this court case and I’m so glad we got this positive result, but I feel hugely relieved that the process is over. Hopefully I’ve opened up a constructive dialogue and maybe prompted others to push for a fairer deal on historical contracts, written at a time when the music industry operated entirely differently.
"I really hope that my own course of action encourages anyone who might feel intimidated by challenging a record label with substantial means. Unlike Domino, I didn’t work with a big law firm and luckily the case took place in the IPEC court (where legal costs are capped) so I was able to stand my ground.
"I hope these types of life of copyright deals become extinct - the music industry isn’t definitive and given its evolutionary nature it seems crazy to me to try and institutionalise music in that way. I feel so thankful for the people who worked with me on this, all of them understood my motivation, and I am truly grateful for all of the fans and artists who showed support for the intention here."
I have a bodacious update on my case with @Dominorecordco. They have recognised my original claim, that I should be paid a 50% royalty on streaming and downloads, and that they should be treated as a license rather than the same as a CD or vinyl sale.— Four Tet (@FourTet) June 20, 2022
The case could now set a precedent for artist and label royalty and contract disputes in the streaming era. However, Four Tet's legal challenge was ultimately settled out of court so any future disputes would not be able to cite a legal judgement.
Nevertheless, the public acknowledgement from a large record label on treating streaming income as a licence rather than sale could establish a commercial precedent, which would then inevitably be used in arguments for separate legal disputes that centre on streaming royalties. Furthermore, the fact that Domino agreed a settlement suggests that Hebden had a strong case, so other artists in a similar position may feel confident about their legal options.
It follows an industry-wide debate about fair streaming remuneration.
Aneesh Patel, Hebden’s legal representative, said: "It has been a privilege to work with Kieran on this case and hugely rewarding to have achieved the outcome we set out for almost two and a half years ago. Throughout, Kieran has conducted himself with the utmost integrity, and in the interests of other artists and his fans who support him."
He added: "I hope that Kieran’s actions and the successful outcome he has achieved will give other artists more confidence to make fair challenges. I hope that the awareness this case has brought will also help add momentum to the ambitions of the Broken Record campaign."
See below for the full legal statement.
Updated June 23: Domino has now issued the following statement:
"Domino are pleased that Kieran Hebden has chosen to settle his 2020 claim and accepted financial terms first offered to him in November 2021. Kieran’s claim arose from differing interpretations of specific clauses in a contract entered into by Kieran and Domino in 2001 in the pre-streaming era, and the application of those clauses to streaming income. Since 2021, Kieran has added to and pursued his claim despite numerous attempts by Domino to settle the matter.
"Neither the Courts, nor the settlement terms, have made any determination as to how streaming should be categorised or streaming income split. The case now having been settled, we are glad to be able to dedicate our full attention to resourcing and supporting our artists and we wish Kieran continued success in his career."
I’m so glad we got this positive result, but I feel hugely relieved that the process is over
Four Tet had won support from fellow artists for his continued fight and claim for damages over the streaming royalties case.
The legal battle centred on a 2001 contract between Four Tet (Kieran Hebden) and independent label Domino Recordings. The case covered historic and future royalties for downloads and streams of three albums - Pause (2001), Rounds (2003) and Everything Ecstatic (2005) - as well as other recordings from that era.
Music Week has documented the landmark case and covered the legal filings and hearings so far. There were various twists and turns, including Domino pulling the music from streaming platforms, which prompted an angry response from artist representatives.
At that point, Domino said that it was saddened by the case.
In February, the three albums released between 2001 and 2005 that Domino removed from Spotify and other streaming services returned for fans to stream in full.
The original claim focused on the streaming royalties rate based on the 2001 contract. Hebden and his legal team were arguing for a 50% rate for streams and downloads.
The dispute arose because the technology was not covered in the 2001 contract, which pre-dated the iPod.
Domino had argued that digital downloads (including streams) are considered a new technology format and Hebden was only entitled to 75% of 18% of the dealer price (ie a 13.5% royalty rate), although the label has paid the full 18% on a discretionary basis.
In February, Deputy Judge Pat Treacy of the Intellectual Property Enterprise Court allowed Hebden’s legal team to pursue an additional claim for breach of contract following the removal of the albums from DSPs. Four Tet was also bidding to win back the rights to his albums, which are under a life of copyright deal with Domino.
However, the electronic artist also faced the possibility of the case moving to a full High Court hearing, which would have made the legal challenge unaffordable. The case has now been concluded.
I mentioned this important case in Parliament when piloting my #fixstreaming Bill - it’s great news that the artist has won the argument for higher royalties - labels take note and pay up! #brokenrecord https://t.co/ETb2Broe7D— Kevin Brennan MP (@KevinBrennanMP) June 20, 2022
Kevin Brennan MP last year made proposals for a Private Member’s Bill, including allowing artists to reclaim their recording rights. He welcomed the result today for Four Tet.
“I mentioned this important case in Parliament when piloting my #FixStreaming Bill - it’s great news that the artist has won the argument for higher royalties - labels take note and pay up!” he tweeted.
David Martin, CEO, Featured Artists Coalition & Annabella Coldrick, chief executive, Music Managers Forum, said: “We’re delighted to see that Kieran Hebden’s (aka Four Tet) case with Domino Records has reached a conclusion.
“The settlement which has been agreed reflects the fact that legacy recording contracts are not fit for purpose in the digital era. That record labels continue, unilaterally, to apply analogue contract terms to streaming is inappropriate, unfair and legally questionable.
“Other record labels must use this opportunity to act on modernising the royalty rates which artists receive for the exploitation of their work in the digital landscape.”
Click here for the full Music Week coverage of the case.
Aneesh Patel, Four Tet's legal representative, statement in full
"It has been a privilege to work with Kieran on this case and hugely rewarding to have achieved the outcome we set out for almost two and a half years ago. Throughout, Kieran has conducted himself with the utmost integrity, and in the interests of other artists and his fans who support him.
"For a high level recap, the disagreement was about how to treat streaming and download income under a contract that was signed 20 years ago, before those channels of music consumption came into existence. Kieran argued that streaming and download income should be treated as a licence, and therefore he should be paid a royalty of 50% under the agreement. Whereas, Domino argued it should be treated the same as a sale, and therefore the 18% rate that applied to CD and vinyl sales should be applied. Domino have now agreed to treat streaming and download income as licensing income and will apply the 50% rate to streaming and download income going forward, and have reimbursed Kieran for the underpayment over recent years.
"Litigation is time consuming, costly and risky. Sometimes the legal costs and relative financial resources of the parties can act as a deterrent to bringing a claim, even when the claimant has a strong case. Kieran brought the case in the Intellectual Property and Enterprise Court (IPEC), where there is a scheme for cost capping and a more streamlined process. This was a particularly important factor in levelling the playing field with Domino, who have significantly more resources than Kieran. Kieran brought the claim himself and was superbly represented by Sam Carter of Hogarth Chambers, who took the case on a direct access basis. Sam works for a prestigious Chambers, and is a highly intelligent and strategic barrister. He also is passionate about music and was committed to the greater goals that this case could achieve for other artists.
"The case came at an important time whilst there was a government enquiry into the economics of streaming and the Broken Record campaign has been gaining increasing momentum. It was mentioned in parliament by MP Kevin Brennan. Recently, the Competition & Markets Authority (CMA) has launched an inquiry into the music streaming industry and will look at the roles played by record labels amongst other things.
"Record labels have seen significant growth over recent years primarily driven by streaming revenue. A record label wields significant control over access to an artists’ work, particularly when they have signed a life of copyright deal like Kieran did. At one point, only a month away from the trial date, Domino pulled down Kieran’s music from digital music services in an attempt to have the case struck out. It was an extreme, and even confusing move, to say the least. Kieran’s fans were outraged at being deprived of his music, and many in the music industry were left puzzled. In my opinion, it was an example of a record label not acting in the best interests of their customers, let alone their artists.
"Domino were not successful in getting the case struck out. Instead, the case became over-complicated. The trial date had to be postponed, the claim then amended to cover breach of release commitments, amongst other things. Domino threatened to move the case to the High Court, which would have prohibited Kieran from pursuing the case any further.
"Kieran took the case as far as he could. The Part 36 settlement offer he received more or less offers what he was asking for from the beginning. The way a Part 36 works is that, if he declined the offer but achieved the same result at trial, he would have had to pay all of Domino’s legal costs from that point onwards. Whilst it’s not the same as a judgement, it’s as close as he’d get to a public result. Importantly for Kieran, it was not a confidential settlement, meaning he could share the result with others.
"I hope that Kieran’s actions and the successful outcome he has achieved will give other artists more confidence to make fair challenges. I hope that the awareness this case has brought will also help add momentum to the ambitions of the Broken Record campaign."