Spotify Pay-Out

Kaajal Shah examines Sony Music’s announcement detailing how it proposes to share its net proceeds from its equity in Spotify with its artists and distributed labels.

Sony Music has just announced how it proposes to share its net proceeds from its equity in Spotify with artists and distributed labels.

Having divested a portion of its equity investment and realised what is reported to be around $750M, Sony has communicated its intention to make payments before the end of August, by way of official letters to artists, managers and labels. Sony has announced that payments will be made without regard to recoupment and regardless of whether required by contract.

It remains to be seen how the other major record companies will react.

The sharing of proceeds will be based upon the percentages (as they relate to each eligible artist or participant) of Sony Music Entertainment (“SME”) overall revenue and SME Spotify revenue, as calculated during the period that the equity was held by SME. The apportionment will enable a range of artists to share in the Spotify value, this includes artists that were attributed to the heritage and success of the label but did not generate the relevant digital income streams.