Sony Music-Pledged Spotify Payouts to Artists, Affiliated Indie Labels Set to Start


June 14, 2018 6:13PM PT

Some 100,000 artists and over 2 million titles could potentially take part in $750 million the company earned by selling its SPOT shares.

Sony Music is holding true to its pledge that it will distribute profits from its sale of Spotify stock with artists and affiliated labels. A letter distributed on June 14 to “eligible artist and participants,” and obtained by Variety, details how the Tokyo-based entertainment giant will approach potential payouts from the $750 million it earned from the sale of its shares (in April, SME divested half of its 5.707 percent equity stake in Spotify).

Some 100,000 artists and over two million titles will potentially be able to participate. Payments are expected to start in August.

The letter’s contents have not been verified by a Sony Music Entertainment representative as of yet.

The memo outlines the “benefit of the Spotify investment presented SME with a unique opportunity to pay additional compensation to all of our eligible artists and participants.” It continues: “As we liquidate this holding in a disciplined manner over time, we will continue to make payments to all of our eligible artists and participants in the same way.”

According to the letter, the company will utilize an allocation formula which gives equal weight to both  verall revenue for Sony Music Entertainment and its portion of Spotify revenue during the period of ownership, after which SME will share said net proceeds with eligible participants. In addition, the payouts will not be subject to recoupment.

As the end of the working day neared, managers and executives scrambled to make sense of the math, while some received phone calls directly from Sony Music brass to explain.

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