LONDON – Representatives of France’s music business have signed what they are hailing as a “historic” agreement that requires record companies to pay set minimum royalty rates for artists and performers from music streams.
The agreement, signed in Paris on May 12 by 14 of the biggest music trade associations and collecting societies in France, including labels trade body SNEP (National Syndicate of Phonographic Publishing), makes France one of the first major music markets to establish minimum streaming royalty rates into law.
Also signing onto the pact were SCPP and SPPF, which collect and distribute royalties on behalf of French labels. (SNEP represents all three majors and the main independent labels and distributors.)
The deal stipulates that record labels that are their own distributor – a category that includes all three major labels – must pay signed featured artists a minimum streaming royalty rate of between 10% and 11% (based on the largest possible basis – in other words 100% of the revenues paid out by platforms to distributors).
Record labels who use a third-party distributor will pay a guaranteed minimum streaming royalty rate of between 11% and 13% on the net amount they receive, after deduction of their distributor’s commission. And record labels that exclusively license their catalog to another company must pay their featured artists a minimum royalty rate of 28%, to be paid out of a net share of royalty income.
The principal deal covers revenues generated by music streaming services like Spotify and Deezer, but the French music groups put in place a separate and simultaneous agreement that establishes the same minimum royalty rates for featured artists from video streaming services like YouTube.
The agreement also establishes the principle of a minimum advance of €1,000 Euros ($1,050) per album that a record label will pay to an artist. The minimum advance is reduced to €500 Euros ($525) for small independent labels with…