Sony to pay legacy artists with unrecouped balances

The landmark policy forms part of a broader initiative called Artists Forward, which was announced in a letter sent to thousands of artists last week. The initiative seeks to improve communication and transparency with creators.

“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,” the letter reads.

“Through this programme, 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.”

Sony has not written off or cancelled the unrecouped balances, but has decided to pay through the royalties earned backdated to 1 January this year. Artists who are eligible for the programme will also include producers, joint venture partners and distributed labels who have signed deals with Sony Music, and the label said it would contact them individually in the coming weeks.

Additionally, musicians will be able to use the company’s Real Time Advances service to get advances on their projected future earnings. The advance tool is available in the US and UK and is expected to be rolled out to other regions this year.

“We’re driven by our mission to provide artists with the best levels of service,” the letter continues. ”The programme we are announcing today is part of that continuing work and further builds on our initiatives and investments in modernised contracts, flexible deal options, advanced data and analytics insights for creators and more.”

Record deals have prevented many artists who have unpaid advances to earn royalties for decades after they first signed their deals. The advent of digital music ecosystem has reshaped how music listeners consume music and how royalties are generated, with a number of industry stakeholders calling for major labels to abolish unrecouped balances.

Sony Music joins independent label organisation Beggars Group, which cancelled unrecouped debt on artist advances 15 years after an artist’s last contractual album. The company has been trying to persuade major labels to follow suit.

At a recent UK inquiry into music streaming economics, one of the talking points was whether companies should wipe out unrecouped balances from the pre-streaming era to give artists more money for the streams generated from their work.