BMG boss: Majors must share Spotify payouts with indies

Hartwig Masuch

BMG CEO Hartwig Masuch has joined the growing chorus demanding that the major labels share the proceeds from any sale of Spotify stock with the indie labels and artists they distribute.

WIN CEO Alison Wenham first made the call on Tuesday (March 6) and Sony Music have already confirmed they will comply. But, as yet, neither Universal nor Warner have responded to a request for comment from Music Week.

Some of the masters catalogues inherited by BMG – which is owned by German media giant Bertelsmann but usually classified as an independent – as part of the Sony BMG buyout, continue to be distributed via Sony. But most new BMG releases go through Warner-owned ADA, and Masuch said he was “absolutely” expecting them and other major label partners to share any proceeds with BMG and its artists.

“We’ll absolutely go after them if they don’t,” he told Music Week. “It’s an absolutely clear case that they have to.”

Masuch said the details of how any windfall was shared would also have to be worked out.

“It’s a very complex situation,” he said. “Do you look at the repertoire that triggered the decision to invest in Spotify, do you look at yearly calibrations of repertoire? There’s an interesting discussion coming up on what is a fair alignment of interests. If everybody takes it really seriously and to the letter, the creative community could be hit with $2 billion (£1.44bn) to be distributed in the next two years. Which should be a very good signal to artists.”

Unlike the three majors, BMG does not own an equity stake in Spotify or other digital services. The three majors have all already confirmed plans to share proceeds from any sale of their stakes with artists signed directly to their labels.

BMG was the fifth largest corporate group in the UK last year, with an All Albums AES market share of 1.6%, and recently announced the appointment of Alistair Norbury to run the UK repertoire operation, replacing Alexi Cory-Smith. BMG has been shortlisted for this year’s Music Week Awards in the Catalogue Marketing Campaign and Publisher Of the Year categories.

Spotify’s IPO is expected to go live later in the month. To read why the streaming service needs to float Wall Street’s boat, click here.

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