Sony Music Entertainment has announced “an expansion of the comprehensive support we provide to thousands of our artists around the world” via a new initiative called Artists Forward, “prioritizing transparency with creators in all aspects of their development,” the company stated in a letter to artists.
The most striking element of the campaign is the “Legacy Unrecouped Balance Program,” whereby the company “will no longer apply existing unrecouped balances to artist and participant earnings generated on or after January 1, 2021 for eligible artists and participants globally who signed to SME prior to the year 2000 and have not received an advance from the year 2000 forward,” the letter reads in part (read the full letter below). “Through this program, we are not modifying existing contracts, but choosing to pay through on existing unrecouped balances to increase the ability of those who qualify to receive more money from uses of their music.”
While contracts differ on particulars, unrecouped balances refer to the money owed to the label by artists whose earnings were less than the amount of recoupable expenses extended by the company, which customarily include a signing advance, marketing, “breakage” and other expenses. Since the advent of streaming such expenses have largely decreased, since there are much-lower physical product costs to deduct; added to that, the fact that pre-2000 artists are still seeing their earnings going to deductions owing to broken CDs is the sort of situation Sony’s move aims to end.
The company made a similar move in 2018 after it sold $768 million in Spotify shares, distributing some $250 million to its artists without allocating them to individual artists’ unrecouped balanced as Warner Music did with its profits.
While nowhere near the scale of Sony Music’s move, other majors have waived unrecouped balances in the past. In 1989, MCA eliminated unrecouped balances and increased the royalty rates for Chess and Checker artists, retroactive to its acquisition of the labels three years earlier. A few years later, EMI’s Legendary Artist Program provided royalty reforms for artists who hadn’t recorded for Capitol, Blue Note and its other labels since 1970, including waiving of unrecouped balances and increased royalty rates.
Sony Music’s letter appears in full below:
June 11, 2021
Dear Sony Music Partner:
Today Sony Music Entertainment is announcing an expansion of the comprehensive support we provide to thousands of our artists around the world, with the launch of a new initiative called Artists Forward, prioritizing transparency with creators in all aspects of their development.
Legacy Unrecouped Balance Program
To enhance our level of service under Artists Forward, we are unveiling a Legacy Unrecouped Balance Program, creating more payment opportunities for our long-standing artists and participants around the world.
As part of our continuing focus on developing new financial opportunities for creators, we will no longer apply existing unrecouped balances to artist and participant earnings generated on or after January 1, 2021 for eligible artists and participants globally who signed to SME prior to the year 2000 and have not received an advance from the year 2000 forward.
Through this program, we are not modifying existing contracts, but choosing to pay through on existing unrecouped balances to increase the ability of those who qualify to receive more money from uses of their music.
In addition, those eligible for the Legacy Unrecouped Balance Program can join other qualifying Sony Music artists in being able to receive advances on projected earnings using Real Time Advances, a new feature available through the Sony Music Artist Portal enabling instant account advances. It is currently available in the U.S. and U.K. and will be rolling out in additional markets around the world later this year. Qualifying artists and participants who use the Sony Music Artist Portal will also be able to request a withdrawal of all or part of their payable balance each month as soon as it becomes available using our industry-leading Cash Out feature.
Artists and participants who qualify for the Legacy Unrecouped Balance Program will be notified of their eligibility separately in the weeks ahead.
A Continuing Commitment to Artists
We’re driven by our mission to provide artists with the best levels of service. The program we are announcing today is part of that continuing work and further builds on our initiatives and investments in modernized contracts, flexible deal options, advanced data and analytics insights for creators and more.
For more information, please speak to your local label representative or visit the Sony Music Artist Portal (sme-artistportal.com).
Sony Music Entertainment