Historically, record labels and the recording artists they partner with have operated under an exploitative business model, one that has been known to deplete the revenues artists generate from their music and increase the shares drawn by the record labels. The imbalance in the relationship extends across multiple pressure points, from unnecessary but long-standing industry standard clauses included in songwriter contracts, to record label ownership of masters, which leaves artists unable to control how, when, and where their music can be played.

Not all chart-topping or award-winning artists have been subject to this exploitative relationship; a growing list of more recent highly successful artists and musicians have built their careers independently, often through streaming platforms, and they haven’t needed to negotiate with record labels to take control of their music and income. But before the rise of these new media alternative paths to fame, artists often had little choice but to sign on with companies that are now attracting the ire of long-established recording artists like Kanye West, who has been outspoken about the need for labels to hand off ownership of artists’ masters.

Witnessing a shift in the availability of alternative options for artists, and facing up to a history of ethically questionable contracts, big recording labels like BMG are taking notice and looking for ways to mend their damaged reputations while also keeping themselves in focus as a necessary option for musicians on the rise.

Some of these changes are forward looking, since big companies will need to change their approach in order to attract young talent lured away by digital alternatives. Polydor and Atlantic have recently offered rising artists on digital platforms “joint venture” deals, which means profits are split 50/50 with ownership of master recordings negotiated on an artist-by-artist basis. Some of the changes are retroactive; BMG is now combing through historic contracts looking for anomalies and removing specific clauses that have harmed artists in the past. But much of the public attention focused on this issue deals with current, big name artists with label relationships who are now demanding changes that will impact them directly.

Taylor Swift and Pharrell Williams, for example, have recently signed contracts with Universal and Sony, respectively, in which both artists retained rights to their master recordings. Taylor Swift’s recent public disclosure of her battle with the music industry paints a common picture: Since signing on with a label (Big Machine) at 15, Swift has had frustratingly little control over the masters of her earlier work, which have been passed in a deal from one label to another. In an article published by The Guardian, Andy Musgrave, the manager of UK rapper AJ Tracey, summarizes the shifting balance underway between musicians and labels. “Master’s ownership (by labels) is becoming less common…. The long license term for recording is more like short term, and the 80/20 royalty split in the label’s favour is completely reversed.”

It remains to be seen how these dual pressures—concern about the reputation of the industry and concern about the rise of alternatives for hot new acts—will eventually reshape recording contracts as we know them.

We’ll be keeping a close eye on the rest of the major labels to see if these types of corrective actions become standard practice. To learn more on this subject, visit my LinkedIn article: https://www.linkedin.com/pulse/changing-relationships-between-recording-artists-record-murphy/

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