Music Industry Responds to Leaked Contract Between Sony and Spotify

A few days ago, on May 22, the Verge published the full 2011 contract between Sony, one of three major U.S. record labels, and Spotify. (The contract has since been taken down due to a copyright claim from Sony. We don't know how that makes sense, but we guess it's none of our business.) The vast amount of money Sony scored from Spotify in this deal could have the power to shift the conversation about who is gouging who in the streaming service economy.

The contract detailed the sums of money Spotify pays Sony in exchange for streaming the label's music, and spelled out huge yearly advances. It also includes a clause that says Spotify must increase Sony's advance to match the advance it pays to any other label, should other labels negotiate a higher one than Sony's, and a deal to hand over up to $9 million in free Spotify advertising to Sony.

It's not clear how much of those advances or advertising revenue, if any, is paid to artists, nor does it detail how much Spotify money Sony doles out to artists more generally.

The International Music Managers Forum, the artist managers trade group, published an open letter asking for more transparency on behalf of labels, citing lack of information on how much money from deals such as these is paid out to artists. The IMMF sent their "observations on some of the dysfunctionality of the music market" to policy makers and the music industry.

"Instead of mystery deals hidden from the artists whose copyrighted creations the deals exploit there should be an obligation for transparency," the group wrote. "We (artists and their representatives) just want the basic information relating to usage (of the music and the artist’s name and likeness) to be shared with us by our commercial “partners”, the labels and publishers."