French Record Business Strikes ‘Historic’ Streaming Royalties Deal
The agreement, which comes into effect July 1, makes France one of the first major markets to set minimum streaming rates for musicians.
LONDON – Representatives of France’s music business have signed what they are hailing as a “historic” agreement that requires record companies to pay set minimum royalty rates for artists and performers from music streams.
The agreement, signed in Paris on May 12 by 14 of the biggest music trade associations and collecting societies in France, including labels trade body SNEP (National Syndicate of Phonographic Publishing), makes France one of the first major music markets to establish minimum streaming royalty rates into law.
Also signing onto the pact were SCPP and SPPF, which collect and distribute royalties on behalf of French labels. (SNEP represents all three majors and the main independent labels and distributors.)
The deal stipulates that record labels that are their own distributor – a category that includes all three major labels – must pay signed featured artists a minimum streaming royalty rate of between 10% and 11% (based on the largest possible basis – in other words 100% of the revenues paid out by platforms to distributors).
Record labels who use a third-party distributor will pay a guaranteed minimum streaming royalty rate of between 11% and 13% on the net amount they receive, after deduction of their distributor’s commission. And record labels that exclusively license their catalog to another company must pay their featured artists a minimum royalty rate of 28%, to be paid out of a net share of royalty income.
The principal deal covers revenues generated by music streaming services like Spotify and Deezer, but the French music groups put in place a separate and simultaneous agreement that establishes the same minimum royalty rates for featured artists from video streaming services like YouTube.
The agreement also establishes the principle of a minimum advance of €1,000 Euros ($1,050) per album that a record label will pay to an artist. The minimum advance is reduced to €500 Euros ($525) for small independent labels with less than 10 employees.
Those sums are considerably lower than most record company advances currently paid to artists in France by the three major labels and main independents, but still represent an important gain for French artists, says Alexandre Lasch, director general of SNEP. He notes that many smaller indie labels do not currently pay advances to artists.
Establishing guaranteed advances along with minimum royalty rates will give artists new protections “while being consistent with the future sustainability of the French music industry,” says Lasch.
In a joint statement, SNEP and SCPP welcomed what they called a “historic agreement” that strengthens the partnership between record companies and artists.
Guarantee Comes Into Effect July 1
The minimum remuneration guarantee comes into effect July 1 and applies to all artists who signed a record deal with a French label or distributor after 2017. Its terms do not apply retroactively to records released before July 1, nor to songwriters. Record producers will only benefit if their contribution qualifies them as performers.
As well as featured artists, session musicians who perform on commercially released records also stand to gain from the deal. Under its terms, they will receive a lump sum equivalent to 20% of their original session fee each time a new sales threshold is reached, beginning with 7.5 million streams.
If a record surpasses 15 million streams, each session musician that performs on it will be due another payment, equivalent to 25% of their original session fee — rising to 35% for 50 million streams. Lasch estimates the additional payments will add up to an average payment of €42 Euros for 15 million streams and €60 Euros for 50 million streams. After that, each multiple of 50 million streams generates another bonus payment for session musicians.
A joint press release from six of France’s musicians’ groups, including Adami and SNAM-CGT (National Union of Unions of Musician Artists of France), welcomed the agreement saying it marks “an important step forward on the path to a fair sharing of value for the benefit of artists.” Already in France, session musicians are protected by the country’s strict collective labor laws, guaranteeing fair and proportional levels of remuneration and minimum session fees. The new payments are a “significant” addition to their income, says Lasch.
For featured artists, the minimum royalty rate guarantees apply to both domestic and foreign streaming revenues collected by their label. For session musicians, the additional payment thresholds are based on domestic streams only.
Negotiations were overseen by Music Mediator Jean-Philippe Mochon, a government appointed official whose job involves reconciling disputes in the music industry. At present, the terms of the deal only apply to signatories, although France’s Minister of Culture is expected to issue a decree later this summer that will make its provisions applicable to all record labels operating in France.
The May 12 Paris agreement comes on the back of high-profile calls from the international creator community for record labels to deliver a greater share of streaming revenue to artists, musicians and songwriters. The United Kingdom, the world’s second-biggest exporter of music after the United States, has been the leading the charge, backed by the support of stars like Paul McCartney, The Rolling Stones and Coldplay frontman Chris Martin.
A nine-month probe into the streaming business by the U.K.’s Digital, Media, Culture and Sport Committee concluded in 2021 that the global streaming model led by Spotify, Apple Music, YouTube and Amazon Music was “unsustainable” in its current form. The British government is now conducting working groups with industry stake holders to explore many of the issues raised by the committee, including remuneration rates.
Meanwhile, one of the measures included in 2019’s European Union Copyright Directive states that EU member countries will pass legislation guaranteeing “appropriate and proportionate remuneration” for creators. France adopted the Copyright Directive into national law in July, precipitating the intellectual property reforms that culminated in this month’s cross-industry agreement.
That deal makes France – the world’s fifth-biggest recorded music market, according to IFPI — one of the first major music markets to establish minimum streaming royalty rates in law, although there are mitigating factors that make comparisons between what’s been agreed in France and royalty rates in other territories difficult.
Under French law, artists signed to a record label are deemed to be employees and are protected by the country’s collective labor agreements. Unlike in other markets, featured artists in France receive royalties from the first album sold, rather than having to recoup their advance first.
These France-specific factors helped determine the minimum guarantees included in the May 12 deal, says Lasch, who says the minimum royalty rates are based on current record deals in France.
In comparison, royalty rates in the U.K. are around 25% to 30% for new artist deals today, according to U.K. labels trade organization BPI. However, royalties from legacy deals are often far lower — sometimes as low as 6% — and are only paid out when a record company’s advance has been recouped.
Annabella Coldrick, CEO of the U.K.’s Music Managers Forum, says establishing minimum streaming royalty rates for artists in France “highlights the important role that Government intervention can play” in the music business. “If the U.K. industry cannot agree [on] meaningful changes to how artists and songwriters are compensated,” says Coldrick, “then we too will probably require renewed political involvement.”