Viewpoint: Sammy Andrews calls for a revenue split rethink

Sammy Andrews

Do the recent rows between songwriters and DSPs show that traditional revenue splits no longer work for the modern biz? In her latest Music Week column, Deviate Digital CEO Sammy Andrews calls for a system revamp…

My last Music Week article on the current streaming wars received a surprisingly heavy endorsement from all sides of the argument, including songwriters, trade bodies and the DSPs themselves.

That’s a clear indication that all parties know and accept the issues they both face. But the piece also received a lot of comments from folks that hadn’t fully grasped the complexity of the challenges in our industry – or the reasons some of those challenges exist in the first place.

So, this month, I want to dig in a little more around that. Let me start by saying I love our industry dearly, but good lord it’s got a mountain of issues that make it hard to find logic in the ever-changing ecosystem.

So, at the risk of having myself knocked off a few Xmas card lists, let’s have a look at some of the biggest elephants in the room: our industry structure, the values attributed to the various entities within that structure and the division of revenues.

For as long as our industry has existed, labels have taken the lion’s share of revenue and rights. In the old days, the splits (arguably) made some sense, owing to the amount of physical work, time and investment involved. They still can if those things are provided, but the landscape is now unrecognisable, unless you are in a very small minority of acts.

Most development heavy lifting is now done by managers (and increasingly publishers). So we have some old-school publishing outfits collapsing under the weight of digital, and others thriving (Kobalt are, in my opinion, a good example of what the future of publishing looks like). But some publishers honestly don’t know their arse from their elbow in the digital world.

Then we have the collection societies, CMOs and PROs who, after years of failing to modernise, are finally having a go. Admirable and overdue but, as tech innovation truly kicks in, they may discover that ship has sailed – although songwriters will always need collective leverage. The system as it exists right now fails songwriters at nearly every turn and increasingly fails artists and managers.

In an era driven by streaming, specifically by content (songs), distributed by the touch of a button and monetised in the blink of an eye, do the old values, models and splits make any sense anymore? I would argue, in many cases, that no, they don’t.

One thing that hasn’t changed is that success in music is still based on the strength of a song. Try as the industry might, you can’t polish a turd for it to have any value in the new economy long-term – and streaming rewards longevity.

There’s a reason radio stations still test songs before playlisting them. Sure, you need a great marketing strategy, investment and team to get noticed but, fundamentally and above all else, you need a good song.

One of the biggest issues facing songwriters right now is the percentage they receive per stream. We’ve got (some) streaming services making a loss and arguing they can’t afford the rise in some territories, while songwriters argue they can’t afford to survive on the current rates (and that’s before we even get started on having multiple writers per track!).

Where are the old guard in all of this? They’re all there with their dusty old rulebooks, taking questionable splits (not to mention equity, requests for perpetuity and blackboxes), all while the majors are reporting record profits from streaming.

On the recorded side of our business, in my day job we increasingly work with managers who are moving away from traditional models. They see a clear lack of value in many deals and systems, and identify the vast potential for tech disruption and innovation to eradicate a multitude of sins inherited from a bygone age.

Equally, though, managers and songwriters see the value that can be presented by some of these entities in some territories with the right investment, tech, transparency, vision and teams. The right ones are worth their weight in gold, but they are increasingly few and far between.

As someone who likes to look at this industry with a view to the future but a thorough understanding of the past, I can say with some certainty the current model is not fit for purpose. Nor are some of the utterly archaic collection or accounting methods and associated licences and processes .

Our industry has been needlessly overcomplicated for years, allowing all manner of nonsense and mischief to hide in the corners of royalty statements. Some of you know that and would much prefer to keep it that way...

What we need is a true overhaul of how the weighty, but heavily rusted, cogs in our industry turn and, you know what? It’s coming, like it or lump it.

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