It Pays to Give: Americans Are Watching What Companies Do to Help

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Artists, employees and consumers are keeping a close eye on business practices during the pandemic and the results could have lasting consequences.

How companies and organizations respond to the coronavirus pandemic will have a lasting effect -- not only on their businesses but also on how the public perceives them.

In an April survey of 1,000 American adults conducted by PR firm Porter Novelli, 75% of respondents said they'll remember which companies provided support during the pandemic, and 73% said they'll remember those that made "bad decisions" that hurt employees or customers.

"People are not just relaying support to companies that are doing good right now," says Porter Novelli executive vp reputation practice Sean Smith, who helped lead crisis management for the Barack Obama administration. "They're going to remember the ones that aren't -- and that's not something we have typically seen." He thinks that shift may come from the way people are pulling together to stall the spread of the virus. "They want to see that [companies are] playing by the same rules."

Many are going beyond that. Universal Music Group's multimillion-dollar initiative includes royalty advances and fee waivers for artists, as well as financial assistance for employees facing hardship; the Recording Academy's affiliated charity, MusiCares, has raised over $10 million for out-of-work music professionals; and Live Nation launched a $10 million fund to support touring crewmembers whose gigs have been canceled.

Other companies are adjusting their usual terms to support creators: Bandcamp dropped its fees on $4.3 million worth of purchases on March 20, forgoing at least $430,000, and is planning to do it again on May 1; and online royalties marketplace Royalty Exchange is reducing its auction commission and speeding up payments, which CEO Matthew Smith estimates will cost the company up to $250,000. "We're a small business, and it's hard, but it's the right thing to do," he says.

Matthew Smith has garnered close to 2,000 signatures for a petition that calls on other music companies to do the same, and many have taken similar steps already. DJ-centric streaming service Mixcloud is waiving its revenue share for the recently-launched Mixcloud SELECT fan subscription service, giving 100% of subscription income to SELECT channel creators; music service Qobuz is waiving its revenue share on the first month of all new paid streaming subscriptions; and online recording studio and music publisher Tunedly has cut prices for its music production services by 50% without reducing payouts to session musicians.

Sean Smith adds that companies that cannot afford to support the community -- and even ones that can -- must at least take steps to take care of their employees. "They may not be accruing goodwill with the public, but they're no doubt generating goodwill with their employees, and that is incredibly valuable right now." Universal Music Group's plan, for example, includes the commitment that any employees who cannot work remotely will not see their pay change through at least June 30.

In the long run, the support that music businesses offer could end up helping everyone involved.

"Companies investing in their employees and in their relationships with artists that provide them their livelihood," says Larry Miller, director of New York University's Steinhardt music business program, "are making an investment in their own future."

This article originally appeared in the April 25, 2020 issue of Billboard.