Breaking Breakage

It has become the unlikely phrase on music industry lips in the last couple of weeks- with Universal now joining Sony and Warner in confirming that it pays ‘breakage’ on streaming advances to artists.

The term, which conjures up images of industry execs maniacally yelling “Breakage, you boy!” in the style of Daniel Plainview of ‘There Will be Blood’ from their plush offices, actually refers to the money left in the pot when an advance or minimum guarantee from a streaming platform agreed with the label is exceeded within a stipulated period.

As reported in The Gen, the leaked Spotify and Sony contract blew the lid on the issue last month, raising various questions around the particulars of major label deals with streaming services.

In the latest development, a shadowy Universal spokesperson told Music Business Worldwide: “Our approach to artist compensation is designed to provide income across multiple sources. While the most significant source is comprised of royalty payments, we also choose to share with artists minimum guarantees as well as unrecouped digital advances, where they exist”.

None of the aforementioned labels have gone on record with what exactly they are paying to artists who receive breakage, which perhaps suggests that it’s on a case-by-case, contractual basis as opposed to a single policy.

Clearly, this opens up a can of worms for labels as far as managers are concerned but the confirmation from Universal was welcomed by the Music Managers Forum (MMF), who issued a statement saying: “The MMF welcomes the addition of Universal Music Group and Universal Publishing to the list of companies that will pay breakage to artists. Warner Music, Sony Music and the independents who signed the WIN charter have been doing the right thing in this area already – some for up to six years”.

The MMF was evidently issued as someone was thinking about lunch, including comments about breaking eggs for an omlette and baking a bigger pie with all of the ingredients, sliced up fairly- The Gen likes to stretch a metaphor as much as any industry newsletter but this was a bit much even for us. Anyway, to read the entire statement, which also touches upon the remit of the recently formed International Artists Organisation (IAO), go to the MMF site.

The breakage debate is heating up, with WIN and AIM CEO Alison Wenham recently enquiring as to the whereabouts of breakage owed to independent labels distributed by major owned companies in an open letter – also raising the point that major labels are arguably using their market share to increase advances from various streaming platforms.