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When Taylor Swift announced Monday its new record deal with Universal Music Group and Republic Records, it has associated the long-awaited contract with an unusual provision: as part of its joint contract with the label, UMG must promise to sell on a non-recoverable basis, part of the windfall of its Spotify shares in the future.
Not only for Swift, but for all his artists.
The warning is wide, even if vague. The three "big three" labels – Universal, Sony and Warner – took stock in Spotify a few years ago. They all promised that the artists would benefit if the labels sold their stakes in the Swedish music streaming company. Universal, the last of three to make such a commitment, announced in March, just before the launch of the public company Spotify on the New York Stock Exchange, the artists "would share the proceeds of the sale of shares." However, according to sources, Swift's Monday agreement states that the hypothetical stock sale will result in payments to Universal's artists, regardless of the status of their account, which means that they will receive money. even if they are in the red with uncovered advances. (Sony gave these conditions to his artists when he cashed Spotify shares at the beginning of the year, but Warner refused to ignore artist balances, which means that much of the money donated by Warner was simply returned to the label.)
A source close to the subject tells Rolling stone Swift's alignment with Sir Lucian Grainge, President and CEO of UMG, particularly for his interest in offering Spotify shares to artists with no holdback, played a key role in the singer's decision to sign an agreement with Universal on the other labels. While the sources refused to give financial details, citing the still hypothetical nature of the issue, Swift said in its announcement that the Spotify provision implied "much better terms" than those proposed by Sony and Warner.
"As part of my new contract with Universal Music Group, I have requested that any sale of their Spotify shares result in a cash distribution to their artist, not recoverable," Swift wrote in a message. posted on Instagram. "They have generously accepted this, that they think they are much better conditions than those previously paid for by other major labels." Swift added that the Spotify clause "meant more to me than any other transaction point" of the new contract, which also gives it ownership of its masters in the future, and that's a sign "we are Let's move towards positive change for creators – a goal that I will never stop trying to achieve, in every way possible. "
For Swift to use its most influential artist status (ie generating revenue) as a trading platform is not new: she asked Apple to ensure that artists are compensated for free trials of the Apple Music program in 2015 – a one-year boycott of Spotify on the relatively meager royalty payments of its free tier. (In flip-flops, she restored her catalog on Spotify last summer.)
But this only reinforces the growing trend for artists in the era of streaming to gain more power than the one previously enjoyed by labels. Music lawyer Gregor Pryor said the Guardian The fact that Swift has not credited its debts to existing receivables by applying Spotify's receipts constitutes the type of artist's contract as a businessman who would not have not been possible before. "Jay-Z did it with Tidal … The artists behave in a way more geared towards improving their returns compared to what the traditional machine – labels and editors – would have be entitled, "he said.
According to the calculations of Music Business Worldwide from a 2008 financial deposit, Universal holds a stake of about 3.5% in Spotify, which represents a value of $ 1 billion, valued at around $ 28 billion by Spotify.
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