Taylor Swift's latest record deal contained a clause in which Universal finally committed to sharing any gains from a future sale of Spotify (which the company invested in along with Sony and Warner) with all its artists, not just those whose accounts are in the black.
It's a major victory that closes a loophole that let Universal promise to give money to artists without ever doing so, and still reaping the PR benefits.
It's a complicated story, so bear with me a second.
Concentration and funny accounting
The music industry is one of the most concentrated in the world. There are only a small handful of big record labels and they have all converged on a set of abusive practices. They haven't necessarily done so via a conspiracy. It's enough that their senior execs get regularly poached from one company to another, spreading the bad practices, as they go -- and even without that, the companies could just copy one another's most abusive practices -- as soon as company A wrings a new concession from musicians, company B can jump on the bandwagon and demand this from all its artists, citing company A as precedent.
Among the bad practices the companies force on artists is funny accounting that lets the companies claw back most of the money the artists generate. Artists are paid advances against eventual royalties for their work, which they must earn back before they start getting paid. But artists are also required to pay back the costs of producing and promoting their work: the studio time, mixing, tour expenses, marketing and PR, etc. Read the rest
