FAC Supports WIN’s Fair Digital Deals Declaration and Fiduciary Duty to Artists

17 July 2014 - Press release

 The FAC welcomes and supports the new ‘Fair Digital Deals Declaration’ made yesterday by the World Independent Network (WIN) and a multitude of independent labels. We applaud how this sets the bar for industry-wide transparency and best practice in its dealings with artists.

In recent years, there have been widespread reports, shrouded in the secrecy of Non-Disclosure Agreements, that digital deals with distributors contain huge upfront payments.

These ‘catalogue-access fees’ or Non-Artist Specific Advances are rumoured to run into hundreds of millions of dollars with long-term royalty rates being significantly lowered in exchange. Unfortunately, it is these rates upon which artist payments are based and excess income that is not attributable to individual artists goes straight to the bottom line of the companies concerned

We understand the financial risk involved in licensing new platforms, especially given the volatile and highly competitive nature of the digital environment. But surely artists should participate in all revenues that derive from catalogue value, however the financial deals are structured?

WIN describe this in terms of fairness. The FAC would go one step further and say that all labels should have a fiduciary duty to artists, as well as their shareholders, to protect and grow the value of the copyrights which are core to their business, and conduct third-party agreements with artists’ best, long-term interests in mind.

This declaration is a huge step forward for the record business and their relationships with artists and we look forward to seeing the list of participants grow to encompass all those who invest in those artists.