Fair Digital Deals Declaration for Artists / FAQ’s

WIN LAUNCHES FAIR DIGITAL DEALS DECLARATION FOR ARTISTS – IMNZ ENDORSED

Worldwide Declaration Signing Day – 16th July 2014

“The big print giveth and the small print taketh away. ”  –  Tom Waits

London, July 15th 2014 – The Worldwide Independent Network (WIN), the organisation that represents the interests of the global independent music community, has announced a major new initiative, ‘The Fair Digital Deals Declaration,’ which will be launched with a Worldwide Declaration Signing Day on July 16th. @winformusic

The Fair Digital Deals Declaration is a statement of commitment made by independent record labels to treat their artists fairly in agreements relating to digital exploitation of artists’ work in recorded music agreements with third parties.

The campaign can be followed on Twitter from the @winformusic account throughout the day where updates from trade associations and labels across the world, including photos and Declaration signing news, will be added using the hashtag #fairdigitaldeal4artists.

In today’s music industry, new digital services launch regularly, and existing services continue to launch new features. In recent years a pattern has emerged whereby large rights owners can secure huge lump sum payments, typically for equity, access, administration, ‘breakage’ and other non-attributable charges.  The artist community has understandably expressed growing concern about the apparent disparity between the value of the overall deal to the rights holder versus the per-stream rate which is often the only revenue shared with the artist.  As it is the artist whose work creates all such revenues, the WIN community has determined to adopt aclear stance for the artist community.

The WIN Declaration makes it clear that signatory companies will share the benefits of dealing with digital services fairly and clearly with artists. This is to amplify our commitment to fairness and transparency, and to ensuring a sustainable economic relationship between the independent recorded music industry and the artists it partners with tobring their music to market.

There are 5 key points to the declaration as follows:

  • We will ensure that artists’ share of download and streaming revenues is clearly explained in recording agreements and royalty statements in reasonable summary form.
  • We will account to artists a good-faith pro-rata share of any revenues and other compensation from digital servicesthat stem from the monetisation of recordings but are not attributed to specific recordings or performances.
  • We will encourage better standards of information from digital services on the usage and monetisation of music.
  • We will support artists who choose to oppose, including publicly, unauthorized uses of their music.
  • We will support the collective position of the global independent record company sector as outlined in the Global Independent Manifesto.

Any label signing up to this declaration will also commit to communicating to their artists that they have signed the Declaration. They will agree to attach a signed copy of the Declaration to their artists’ royalty statements at the next royalty payment run to demonstrate their support for the initiative.

In addition WIN will coordinate a Worldwide Declaration Signing Day on July 16th with independent music trade associations around the world announcing their individual member labels’ support through local and international media channels.

Alison Wenham, Chairman of WIN said, “A healthy commercial relationship based on mutual trust and partnership between artists and labels is critical to the long term financial health of our industry. We believe that this new initiative, which seeks to put in place simple, fair and transparent guidelines for labels dealing with third partydigital partners is a template for best practice. We invite companies – majors and indies – to join the hundreds of companies who have already signed and put a stop to the practise of diverting revenues from the artists without whom we would not have a business.”

The group who developed the Declaration consisted of Emmanuel de Buretel/Because, Martin Mills/Beggars, Alison Wenham/WIN, Justin West/Secret City, Darius Van Arman/Secretly Group, Florian Von Hoyer/Altofonte, Doug D’Arcy/Faith and Hope, all members of the WIN Council.

Martin Mills, Group Chairman of the Beggars Group said: “ Why wouldn’t we treat artists fairly? It seems so obvious that we shouldn’t have to say it, but let’s say it, loud and proud”.

Darius Van Arman, co-founder of the Secretly Group said: Dead Oceans / Jagjaguwar / Numero Group / Secretly Canadian, added: “The bedrock of trust between artists and labels is artists receiving a fair share of the revenue that is earned fromtheir work, where labels convey financial terms transparently and comprehensibly to artists. This is how the independents prefer to do business. Our signing of the Labels’ Fair Digital Deals Declaration demonstrates our commitment to this ideal and is an invitation to all industry participants to make the same commitment.”

Justin West, President of Secret City Records commented: “No constructive businessrelationship is sustainable without fairness and transparency. The more that we all reinforce those principles, the stronger an industry we will be.”

Emmanuel de Buretel, Founder of Because Group said: “The dematerialization of music distribution has opened and simplified the access of music to consumers, but deals with digital platforms have seriously complicated reporting between the artists and the labels. The only way to create a long lasting relationship between artists and labels is to apply total transparency with regards to our deals with the distribution platforms and that is what this Declaration promises from us.”

Christy Whelan, Chairperson of Independent Music NZ said: “We at IMNZ are proud to support this initiative and demonstrate our commitment to fairness and transparency when dealing with the complex issue of Artists’ digital rights.”

Our special thanks to Tom Waits for permission to use his quote.
The Worldwide Independent Music Industry Network (WIN) is a global forum for the professional independent music industry. It was launched in 2006 in response to business, creative and market access issues faced by the independent sector everywhere. For independent music companies and their national trade associations worldwide, WIN is a collective voice. It also acts as an advocate, instigator and facilitator for its membership.

www.winformusic.org

If you wish to sign the Declaration on behalf of your label, you can download a digital copy here. Labels’ Fair Digital Deals Declaration (Final) To sign up please print and sign a copy and send to info@indies.co.nz

LABELS’ FAIR DIGITAL DEALS DECLARATION – FAQ/INFORMATION SHEET

PART 1 – FAQs

What is the Labels’ Fair Digital Deals Declaration?

The Labels’ Fair Digital Deals Declaration is a statement of commitment by independent record companies to treat their artists fairly in agreements relating to digital exploitation of artists’ work in recorded music agreements with third parties.

Background – why are we doing this?

In today’s music industry, new digital services launch regularly, and existing services continue to launch new features. A pattern has emerged whereby deals are done by the services with the international major companies which are usually different, and less favourable than those offered to independent companies. A key ingredient of these different deals is that the majors often receive some form of upfront benefit (either a payment or equity stake in the company), which is not connected to the actual usage of music. Revenues received in this way are unattributable to the use of individual recordings. They may be referred to (and treated) as advances, equity, delivery fees, breakage, administrative charges or other charges.

In all cases, these payments or benefits are not connected to the usage of music, which creates a mechanism whereby the companies do not share these revenues or benefits with their artists.

The WIN Declaration makes it clear that signatory companies will not treat their artists like this, and will share benefits of dealing with digital services fairly and clearly with artists. This is to amplify our commitment to fairness and transparency, and to ensuring a sustainable economic relationship between the independent recorded music industry and the artists we partner with to bring our products to market.

How did this idea come about?

The idea came out of the WIN Council dinner held at Midem in early 2014. The group tasked with creating the declaration included Alison Wenham, Martin Mills, Darius van Armen, Justin West, Doug D’Arcy, Emmanuel Du Burutel and Florian von Hoyer from the WIN council. The Declaration was developed through emails and discussions, to arrive at the final document.

Feedback from WIN labels has been very positive indeed, and outside our community there has been a positive reception so far. For example, the artist group in the UK have seen it and described it as a ‘game-changer’.

The simple intention is to ensure that artists are treated fairly and with transparency. Crucially a company is committing to sharing what is unattributable revenue with artists, which may be equity or breakage.

What is this FAQ sheet for?

This FAQ sheet is to assist WIN TAs and their member companies with supporting information, reasoning and background to the WIN Labels’ Fair Digital Deals Declaration.

This information is and to help TAs and labels understand the reasons why the Declaration is so important at this time. It is also intended to help with any press enquiries, local or international around the time we launch the Declaration.

What do I have to do internally after I/we have signed the Declaration as a label?

We request that you communicate to your artists that you have signed the Declaration. We further request that you attach a signed copy of the Declaration to your artists’ royalty statements, at the next royalty payment run. This way they will be aware of the existence of their label’s commitment to them. Please feel free to include these FAQs when you communicate with your artists.

What is the plan to launch the Declaration?

The launch will be a Worldwide Declaration Signing Day, scheduled for 16th July 2014. This date was agreed as the official launch date for the Declaration at the WIN meeting in NY on 16th June 2014.

Signatures and supporting statements and material (see below) from WIN member companies from every country will be gathered in advance of this date. On the day itself, we will announce the signatories in each country to the press in real time around the world announcing each countries signatories at the same time, local time, throughout the day.

This will be announced to the press in advance of July 16th. WIN Secretariat will be responsible for tracking and presenting signatories, comments, photos and videos of signing and other input from members on the winformusic.org website and on Twitter through @winformusic.

This FAQ sheet should be used when WIN, as a community of independent companies, officially ‘launches’ the Declaration.

What do I have to do for launch?

We need every independent company who is a member of every WIN TA to review, and if happy, sign the declaration, and to make some kind of statement of support, to add to the launch event. This should include a photo or video of each company signing a printed version of the Declaration, and a written statement of support. This must be sent to WIN Secretariat at least the week before 16th July 2014.

More information will be circulated by WIN Secretariat.

Can I translate the Declaration, WIN Manifesto and FAQ information into my local language?
Yes – please do so, as this is intended to be accessible to all. Please share all information with your local members.

Have we obtained permission from Tom Waits to use his quote?

Yes, we have obtained permission from Tom Waits, via his management, to use his quote.

Who else has signed the Declaration so far (as at 16 July 2014)?

739 signatures from 24 countries have been collected so far. Companies and individuals committed so far include:

Alan Galbraith – Wind Up US

Darius Van Arman – JagJagwuar

Peter Quicke – NinjaTune – UK

Playground Music Sweden – Jonas Sjostrom

Glassnote – Daniel Glass – US

Beggars Group – Martin Mills

Matador

Rough trade

XL

Young Turks

4AD

Stolen Records (UK) – Merida Sussex

Hospital Records (UK) – Chris Goss

Ambiguous Records (UK) – Al Mobbs

Finetunes Distribution (Germany)

The Leaf Label (UK) – Tony Morley

Mute (UK) – Daniel Miller

Moshi Moshi (UK) – Michael McClatchley

Secretly Group (USA) – Darius Von Armen

Cooking Vinyl (Australia)

Epitaph (Europe/US)

Because – Emmanuel Du Burutel

Altofonte Distribution (Spain) – Florian Van Hoyer

Secret City – Justin West

Dualtone USA

Essential Distribution

Fat Cat

Hopeless Records

Warp Records (USA)

Nacional – USA

PART 2 – SUPPORTING INFORMATION ON EACH POINT OF THE DECLARATION

Additional information to explain/expand each point is below:

Point 1:

Ensure that artists’ share of download and streaming revenues is clearly explained in recording agreements and royalty statements in reasonable summary form.

This is a straightforward pledge that labels are making to improve the information that labels make available to artists on digital deals which affect those artists. The scope of the Declaration overall is to digital agreements ONLY. Labels are free to decide for themselves what level of detail is required, case by case. They are committing to making this information available to artists in reasonable form to artists – if the artists feel they have enough information, then this would be considered reasonable. Too much (and certainly too little) information may not be considered reasonable.

Point 2:

Account to artists a good-faith pro-rata share of any revenues and other compensation from digital services that stem from the monetization of recordings but are not attributed to specific recordings or performances.

This point is crucial, as it refers to the fact that money can be paid to a record company which cannot be directly linked to the streaming or other digital use of an artist’s recordings. These payments can be made up of equity (shares or equivalent stakes in the company offering the service) as well as other payments for delivery, administration, ‘breakage’ and other charges so that the artist only receives the per stream rate but none of this money. Some of it can be deducted where there are real costs, but we think unfair that the artists does not benefit from the other ‘hidden’ income. This reflects a practise that has grown up form large copyright owners to charge huge upfront sums.

Labels are free to decide for themselves exactly what constitutes a ‘good faith pro-rata share’, and this will vary from case to case. What matters is that the label is committing to sharing with its artists, in a fair manner, benefits which may come to the label which do not relate directly to the exploitation of particular recordings.

Point 3:

Encourage better standards of information from digital services on the usage and monetisation of music.

This point is not a commitment between the label and the artist. It is rather a statement that the label is making to the artist to support the artist’s interests when it comes to the manner in which both labels AND artists are served by digital music services and to encourage an improvement in the information available to the record company from the service provider.

Point 4:

Support artists who choose to oppose, including publicly, unauthorized uses of their music.

This is a statement which shows that a label will support any of its artists who wish to speak out against piracy and other unauthorised uses. Artists are of course free to choose how they react or deal with unauthorised usage of music, but the intention is that labels will support those artists who do.

Point 5:

Support the collective position of the global independent record company sector as outlined in the Global Independent Manifesto below.

This is fairly self-explanatory, but the Declaration itself is a practical development which comes from the general intentions of the Manifesto. The Manifesto itself is attached as an annex to the Declaration.

WIN – 30 June 2014

Here’s Steve Garden at Rattle Records, showing you how it’s done!
Steve at Rattle