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BMG tackles discrimination in old record contracts

Record label and Publisher BMG revealed last Friday that four of the 33 label catalogues it has acquired over the years show statistically significant differences between the royalties paid to black and non-black artist. Following the Black Out Tuesday initiative earlier this year the company launched an audit into its historical record contracts to determine whether Black artists were fairly compensated. After last Friday's reveal, BMG is now planning to dig even deeper into the contracts relating to that catalogue to determine the reason for the differences, while also committing to “bring forward measures which will benefit the lowest paid recording artists across all of its catalogues”.

Publishing a number of stats relating to the review - which was independently audited - BMG told on Friday that the 33 label catalogue it acquired feature music from 3163 artists of whom 1010 (32%) are back. Fifteen of the catalogues feature both black and non-black artists, in eleven of those catalogues there was no evidence of racial disadvantage, so black and non-black artists were getting more or less the same terms in their contracts. However, “in the case of four labels there was a statistically significant negative correlation between being black and receiving lower recorded royalty rates, a difference ranging from 1.1 to 3.4 percentage points”.

BMG also reviewed the 800+ new recording agreements it has directly entered into with artists since 2008. There they found no negative correlation between lower recorded royalty rates and black artists across those deals.

While BMG will now further investigate the catalogues where black artists were treated less and seeks to address those seemingly discriminatory contract terms, the company is also calling on the wider music industry to follow its lead to tackel discrimination, noting that its acquired catalogues account for a relatively small share of black music history.

“While difference is not necessarily evidence of bias, there were instances of differences that are significant enough that they warrant closer attention,”

BMG COO Ben Katovsy told Rolling Stone;

The label has pledged to finish the complete audit in 30 days, but found the investigation harder to conduct than expected. But Katovsy added:

“While these legacy contracts may have been entered into willingly, are fully legally enforceable and we paid the previous owners full market value for them, we feel we can do better. We will shortly bring forward proposals designed to do just that.”

BMG CEO Hartwig Masuch said:

“Since before the dawn of rock n roll, virtually all pop and rock music has its roots in black music. Yet music’s history books are littered with tales of discriminatory treatment of black musicians. It is time for the music industry to address its past”.
“Making good on our commitment to search for racial disadvantage in our historic acquired recorded catalogues has been an enormous and highly complex task”,

he added.

“We have learned a lot and there is still more to discover. We will act on this knowledge. We invite other labels to join us in this mission – to turn the promises and hopes of Black Out Tuesday into action”.

BMG presented the results of its contracts review to the US-based Black Music Action Coalition. The Chairs Binta Niambi Brown and Willie ‘Prophet’ Stiggers have likewise called on other music companies to follow BMG’s lead.

“Gathering, understanding and sharing data describing historic inequities in the music business is a core activity of the Black Music Action Coalition, which was formed to advocate for an end to structural and systemic inequality in the music business and broader society”,

they said.

“We welcome this initiative by BMG and believe if all other labels were to follow suit, this could be a game-changer for black artists throughout the industry”,

they added.

“We cannot fix what is wrong if we do not investigate and hold ourselves accountable for whatever the results may be”.

Legacy record contracts have also reentered te spotlight in the ongoing and evolving debate around the streaming market. Some legacy artists whose catalogues has been revitalised by the shift to streams are not really seeing the benefit because of old contract terms that provide low royalty rates and sometimes allow labels to make further deductions before even calculating that royalty. Many artists, managers and lawyers argue these old-fashioned terms should not apply to new income streams.

BMG also committed to end one of the more controversial of those terms the so called "controlled composition clause" that was common in US record contracts, which reduces the payments a label must make to songwriters and music publishers with physical releases. Under the term, writing artist where forced to provide the label with a discount on the standard rate set under US copyright law. BMG announced in October that it would remove that clause form its new and legacy record contracts.


Source: CMU | Pitchfork