In a significant development in the battle over streaming royalties, veteran electronic musician Four Tet has settled his dispute with U.K.-based Domino Records and will receive an unusually high 50% royalty rate for streaming and downloads on songs covered in a 2001 contract, according to a report in Music Week. The musician, whose real name is Kieron Hebden, also has been reimbursed for an underpayment of £56,921, plus interest.
While the terms of the deal have been publicly disclosed, the fact that it was settled out of court means that it cannot be cited as a judgement in other cases. However, the settlement is significant in that it finds a large independent record label treating streaming income as a license rather than sale, and could be used as a precedent in such disputes in other ways, not least as an inspiration for other musicians to make a similar stand.
A rep for Domino did not immediately respond to Variety‘s request for comment.
At the core of the long and complicated case was Hebden and his legal team arguing for a 50% rate for streams and digital downloads, which pre-dated and were not covered in his 2001 contract. Domino had argued that downloads and streams should be considered a new technology format, and thus Hebden was only entitled to 75% of 18% of the dealer price for physical product, although the label had chosen to pay him the full 18%.
The dispute became contentious enough that last year the label removed the material in question, which was released between 2001 and 2005, from streaming services, although it was restored in February.
In a lengthy statement on social media, Hebden said in part: “I have a bodacious update on my case with Domino. They have recognised my original claim, that I should be paid a 50% royalty on streaming and downloads, and that they should be treated as a licence rather than the same as a CD or vinyl sale.
“It has been a difficult and stressful experience to work my way through this court case and I’m so glad we got this positive result, but I feel hugely relieved that the process is over. Hopefully I’ve opened up a constructive dialogue and maybe prompted others to push for a fairer deal on historical contracts, written at a time when the music industry operated entirely differently.
“I really hope that my own course of action encourages anyone who might feel intimidated by challenging a record label with substantial means. Unlike Domino, I didn’t work with a big law firm and luckily the case took place in the IPEC court (where legal costs are capped) so I was able to stand my ground.”
The settlement comes against the backdrop of several larger battles over streaming royalties, including ongoing and forthcoming disputes in the U.S. that have seen streaming services appeal a 2018 decision by the Copyright Royalty Board that awarded music publishers a nearly 45% increase in royalties, and an ongoing similar battle in the U.K. that has gone as far as hearings before Parliament.
Aneesh Patel, Hebden’s legal representative, told Music Week, “I hope that Kieran’s actions and the successful outcome he has achieved will give other artists more confidence to make fair challenges. I hope that the awareness this case has brought will also help add momentum to the ambitions of the Broken Record campaign,” he said, referring to a movement in the U.K. to reform streaming payments.
He further unpacked the settlement in a statement, which reads in part: “The disagreement was about how to treat streaming and download income under a contract that was signed 20 years ago, before those channels of music consumption came into existence. Kieran argued that streaming and download income should be treated as a licence, and therefore he should be paid a royalty of 50% under the agreement. Whereas, Domino argued it should be treated the same as a sale, and therefore the 18% rate that applied to CD and vinyl sales should be applied. Domino have now agreed to treat streaming and download income as licensing income and will apply the 50% rate to streaming and download income going forward, and have reimbursed Kieran for the underpayment over recent years.
“Litigation is time consuming, costly and risky. Sometimes the legal costs and relative financial resources of the parties can act as a deterrent to bringing a claim, even when the claimant has a strong case. Kieran brought the case in the Intellectual Property and Enterprise Court (IPEC), where there is a scheme for cost capping and a more streamlined process. This was a particularly important factor in levelling the playing field with Domino, who have significantly more resources than Kieran. Kieran brought the claim himself and was superbly represented by Sam Carter of Hogarth Chambers, who took the case on a direct access basis. Sam works for a prestigious Chambers, and is a highly intelligent and strategic barrister. He also is passionate about music and was committed to the greater goals that this case could achieve for other artists.
“Record labels have seen significant growth over recent years primarily driven by streaming revenue. A record label wields significant control over access to an artists’ work, particularly when they have signed a life of copyright deal like Kieran did.”
From Variety US