Deal Points for Digital Distribution

If you’re in the music business, you’d have to live under a rock not to know that many artists don’t like streaming services.  You may also be aware that many artists also have issues with digital retailers whose advertising arms sell ads to pirate sites.  Well, that kind of narrows it down, I guess, but you get the idea.

It’s gotten to the point where artists need to have control over where their music appears online.  Distributors should not be able to force an artist to make their records available on any digital retailer that the artist dislikes.  Artist should be able to decide that they want their music on iTunes Radio and not on Spotify, for example.

Another area that artists should be able to get control over is who gets an exclusive track or release.  For example, if an artist wants to give iTunes a Beyonce-type release, the artist should be free to do so.

Both these points need to be addressed in the artist’s recording agreement or distribution agreement because if there is no contractual prohibition on the label, there’s nothing to stop the label from agreeing–for a large amount of cash that is not shared with the artists on that label, no doubt–that the label will not cherry pick which releases they make available to particular retailers and that the label can’t give an exclusive to any one retailer.

Another provision you should expect to see is a “mandatory monetization” clause.  This means that artists will be forced to “monetize” their music or videos on ad-supported services (also known as whoring the catalog).  If you have an artist who doesn’t want to be associated with random advertising, you might have a problem and perhaps you should negotiate a default of “no monetization”.  Otherwise your client may find themselves selling something they didn’t anticipate.  Something like this, for example (Ads by Google):

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Some artists might say, for example, that the retailer cannot have an affiliate that serves ads to any site that is listed on the top 500 sites on the Google Transparency Report.  This is a restriction that is rationally related to the purpose of the artist agreement as any company that serves ads on pirate sites profits from piracy and undermines not only the artist, but also other retailers that the artist may choose to approve.

These points could prove difficult to get, but practically every “standard” give in an artist agreement was difficult to get at one point.

These streaming and “free” services remind me of record clubs–and a holdback on record clubs was absolutely standard, anywhere from 90 days to 12 months.

And just think–record clubs didn’t even capture fan behavioral data to resell to the highest bidder.  And pocket that data mining money for their own grubby little paws.