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Why are the labels paying the "sale" royalty to their artists if no such thing is occurring? Was the track sold or was it licensed?
by function_seven 4y ago
Why are the labels paying the "sale" royalty to their artists if no such thing is occurring? Was the track sold or was it licensed?
- Closi 4y agoThey sold a license. This is like saying "Was a movie ticket sold or was it admission?" - you can purchase admission, so it's a nonsense question. The contracts will then define what a particular transaction means in a particular context, and what the royalty rate is. Without seeing the exact contracts and definitions of 'sale' and 'license', which are suspiciously absent in the article, then the whole premise of the article is IMO missing substance.
- function_seven 4y agoFair enough on the contract details. Neither of us know the language used in the artist contracts. I'm willing to bet many of those were drawn up in the age before digital distribution, hence the arguments. I'm not confused by the concept of purchasing ("buying") a license. I get that! But if the label is using one concept to determine the royalty rate, but switching to a difference concept to determine the customer's rights, then there's still a problem. Again, I don't know the details of the artists' contracts. But I do know this is probably relevant for some subset of artists whose contracts don't deal directly with digital distribution. In those cases, when terms like "license" and "sale" are used to denote different things, there's a problem if the labels use "sale" on one hand, and "license" on the other hand. If they sell me a license, the artist should be paid the "license" rate.
- Dylan16807 4y agoIf we follow that train of reasoning, that it counts as a "sale" when a license is sold, then what are the license royalty rates for? All paid licenses are sold!