Coronavirus

AWAL to Distribute Proceeds From Merlin's Sale Of Spotify Shares With Artist Clients

AWAL
Courtesy of AWAL

         

Kobalt's recorded-music division AWAL will be distributing its proceeds from Merlin's sale of Spotify shares to its clients on a pro-rata basis in mid-August, Billboard has learned.

In the early morning last Wednesday (Jul. 25), AWAL sent an email to clients outlining the process by which the company will allocate these proceeds. Affected artists will include those who collected recording royalties through AWAL between Sep. 2012, the month when AWAL joined Merlin's licensing agreement with Spotify, and Mar. 2018, the last month before Merlin made the decision to sell its entire equity stake in the streaming service.

Merlin has already shared its proceeds from the sale on a pro-rata basis with its member base of over 800 indie labels, based on the proportion of Spotify royalties each member received during the respective time period. The agency has tasked members with independently handling and sharing the windfall among their own artists; AWAL is one of the first Merlin members to speak openly and transparently about doing so.

"We are allocating AWAL's share of the proceeds pro-rata between all our clients using information reported to us by Merlin at a recording level," reads AWAL's email. "In other words, if an AWAL client’s recordings were responsible for two percent of all AWAL Spotify royalties between September 2012 and March 2018 then that client will receive two percent of our portion of Merlin’s share proceeds."

An AWAL rep confirms to Billboard that this arrangement includes artists who are no longer signed to AWAL, but who collected royalties from the company during the above accounting period. On the flip side, current AWAL clients who began generating recording royalties after Mar. 2018 will not be receiving any proceeds from Merlin's sale.

Affected artists will see a new line in their Jun. 2018 income statement titled "Pro Rata Share of One-Off Income," which will be commissioned at the same rate as digital distribution income (15 percent), according to the email. The statements will be sent out to artists in mid-August.

Considering that AWAL has 25,000 artist clients, and is one of over 800 members of Merlin, one might wonder whether the resulting windfall for its artist-clients will actually be significant.

AWAL says yes: "We consider every source of income absolutely critical for our clients," CEO Lonny Olinick tells Billboard. "In this case, as one of the largest members of Merlin, many of our clients will receive significant income from this distribution. We always treat our clients income as fairly and transparently as possible and have a clear policy for distributing all income we receive on behalf of clients regardless of the source."


THE BILLBOARD BIZ
SUBSCRIBER EXPERIENCE

The Biz premium subscriber content has moved to Billboard.com/business.


To simplify subscriber access, we have temporarily disabled the password requirement.