BMG RESPONDS TO ARTIST STREAMING REVOLT IN GERMANY: ‘IT IS TIME FOR RECORD COMPANIES TO CHANGE.’

  BMG RESPONDS TO ARTIST STREAMING REVOLT IN GERMANY: ‘IT IS TIME FOR RECORD COMPANIES TO CHANGE.’

As the Grammys continues to dominate discussion in the US music industry, an important story regarding artist streaming royalties in Germany is gathering pace.

Guest Post BY TIM INGHAM of Music Business Worldwide 

As MBW reported Friday (January 24), a group of managers and lawyers representing some of Germany’s biggest artists have written a joint letter to the leaders of the four biggest music rights companies in Germany – Universal, Sony, Warner and BMG. 

The agenda of the letter, undersigned by representatives of 14 artists, “becomes clear very quickly”, according to the Frankfurter Allgemeine Zeitung newspaper (F.A.Z), which published a more detailed story on the matter today (January 26) on the front page of its business section. Translated, F.A.Z says that the artist reps are demanding “more money from the booming business [created by] music streaming services such as Spotify and Apple Music”.

What’s also clear from the letter, according to F.A.Z: unlike prior artist protests against streaming, the letter does not direct its ire towards digital platforms, but instead “attacks record companies” and is “of the opinion that [the majors] are taking too much of the streaming millions”. 

It should be pointed out for context that most of the artists represented – including the 15m-plus-selling pop star Helene Fischer (pictured) and rock band Rammstein – have traditionally enjoyed large sales of physical records and downloads. 

According to F.A.Z, the artist reps say there is “an urgent and fundamental need to review and, if necessary, restructure the billing and remuneration model in the area of streaming”. This suggests that they may be seeking a switch to a ‘user-centric’ style of payment from the streaming services, who have to date been reticent to embrace this model. 

Last year, Deezer announced that it planned to launch a pilot of a ‘user-centric’ payment system in 2020, if it could gain the requisite support from the major record companies. 

“WE DO NOT FIND IT JUSTIFIABLE IN A WORLD IN WHICH RECORD COMPANIES NO LONGER HAVE THE COSTS OF PRESSING, HANDLING AND DELIVERING PHYSICAL PRODUCT FOR THEM TO TRY TO HOLD ON TO THE LION’S SHARE OF STREAMING REVENUES.” 

BMG SPOKESPERSON 

The letter contains a segment where the artist reps call into question the “adequacy of the remuneration” their clients are receiving from the record companies. 

The artist reps have asked record companies bosses to meet in mid-February in a Berlin hotel to discuss the letter, which F.A.Z reports has a tone “reminiscent of a court summons”. 

Sony and Universal are yet to publicly respond, says the newspaper. Warner has said it won’t be participating in the Berlin meeting due to antitrust concerns that would be created by powerful music companies plus so many representatives of stars coming together to discuss collective business arrangements. Instead, Warner says that “bilateral talks” are being held. 

The MD of JKP – the management company behind Die Toten Hosen – is Patrick Orth. A signatory of the letter, Orth says that the group of 14 artist reps have “very different motives” for backing the collective action. 

Of the music companies targeted, BMG, led by CEO Hartwig Masuch, has been the most forthcoming with its response to the letter. 

A BMG spokesperson said today: “We strongly welcome this attempt to highlight some of the inequities of the traditional record deal. This letter is signed by some of Germany’s most respected music managers and should be taken seriously. 

“We need a sensible, grown-up debate. We do not find it justifiable in a world in which record companies no longer have the costs of pressing, handling and delivering physical product for them to try to hold on to the lion’s share of streaming revenues. 

“The world has changed. It is time for record companies to change too.” 

The headline of the F.A.Z business story today is ‘Der Aufstand der Stars’, translated: ‘The Revolt Of The Stars’.

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