Two lawsuits could reshape how much labels pay artists for streaming

Two lawsuits – one involving indie artist For Tet and the other legendary rockers Orleans – take aim at how record labels calculate streaming payments to artists.

Collectively they could have a major impact on how much artists get paid when their music is streamed on Spotify, Apple Music, and other DSPs.

Four Tet vs Domino

In August 2021, Four Tet aka Kieran Hebden sued UK indie label Domino for applying a historic royalty rate to streaming revenue and downloads of four albums he released on the label between 2001 and 2010.

When he signed, streaming services didn’t exist. His contract stipulated an 18% royalty rate for physical sales and that’s what Domino then paid on streaming. Hebden’s lawsuit argued that a 50% royalty was “reasonable” and sought damages.

Last November Domino retaliated by pulling his first three albums off all streaming services.

Last week, the lawsuit was settled with Domino agreeing to pay the full 50% and that streaming should be treated as a license rather than the same as a CD or vinyl sale.

While not binding on other labels and artists, Domino’s settlement agreeing to pay 50% sets a precedent that others may be forced to follow.

At minimum expect more lawsuits based on similar claims.

Orleans vs. Warner Music

Another lawsuit, this one between the band Orleans and Warner Music, could also have a broad impact on how artists are compensated for streaming.

Still active today, Orleans is best known for their hits “Dance with Me” and Still the One.” Co-founders Lance Hoppen and John Hall file a lawsuit last week alleging that Warner has been deducting international “intercompany charges,” from its foreign affiliate companies that unfairly reduces what they and other artists get paid.

In their lawsuit, Hoppen and Hall call foreign fees “a relic of the days when the collection of revenues from foreign record sales entailed significant labor.” With digital streaming and then digital reporting, revenue collection and payment should now be virtually automatic.

Class Action

What’s potentially game-changing about this lawsuit is that it is seeking class-action status which would include other musicians. So beyond eliminating onerous fees that reduce Orleans’ royalties – it could mean fairer payments for thousands.

Together the lawsuits could lead to fairer treatment for all artists.