Big Tech’s Inverted “Bump”: When demand goes up, royalties go down

Greg Sandoval has an interesting article today (“Web Radio Growing Faster Than On-Demand Services“) that points out another clear example that the new boss is worse than the old boss.

It has been a time-honored tradition in record deals (and many other types of creator contracts) that if your record has success, your royalty rate increases incrementally.  These are called “bumps.”  For example, a 16% artist royalty would increase to 17% at 500,000 and then to 18% at 1 million.  (Of course in contemporary record deals, those sales bumps would be much lower, closer to 100,000 and 250,000–in fact, as low as you can get them.  While the principle of reward for good performance is the same, the thresholds are much lower.  Why might that be do you suppose?)

Pandora, Google, Sirius, Clear Channel and their Big Tech and Big Media pals are proposing a different approach–the inverse bump.  If you are popular, your rates will go down.

Is this why Tim Westergren drones on about the “middle class artist”?  Because he doesn’t want you to be too successful?

Think about this when Pandora gets done with their ASCAP lawsuit against songwriters.  That ASCAP check?  Great news, you were successful on Pandora, so they cut your royalties.

If you want to voice your opinion on IRFA, Senator Ron Wyden has a comment page on his Senate website click here.