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Martin Mills discusses Beggars’ reduction of streaming royalty split for artists

By Andy Malt | Published on Wednesday 7 May 2014

Beggars Group boss Martin Mills has discussed the decision made by his company to cease paying a 50/50 royalty on streaming income to artists signed to its labels.

As previously reported, at a MusicTank event last month, Beggars Head Of Digital Simon Wheeler confirmed that the company was reviewing its 50/50 split, saying that streaming now accounts for 40% of the company’s total digital income and as it becomes such a core revenue stream, that split becomes unviable.

Speaking to Billboard, Mills has now explained: “A record company such as us, needing to provide the services we do, cannot survive even paying artists 50% of net core income, let alone 50% of gross as we have been doing. As streaming becomes core income, it has to bear its share of all our costs: A&R, overhead, marketing, promotion, back office services, etc”.

He added that while the final decision on what royalty will be paid on streaming in the future is yet to be made, it will be “significantly higher than the regular rate” offered by other labels, saying: “Beggars contracts actually only provide for the payment of a regular royalty on exploitation such as streaming. We have been applying the 50% discretionary rate policy to all contracts, of whatever vintage. Although we have not yet determined our new policy for existing contracts, the current intention is to continue to apply the new rate to all existing agreements”.

He continued: “Although our policy has meant, and will continue to mean, that we have been paying out a lot more in royalties than we contractually have to, we feel comfortable in doing that in that it has made the artists’ income from such services more attractive. Many of our artists have been consequently deriving a very significant proportion of their income from streaming”.

Read the full interview here.