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Warner Music Group to Share Equity Stakes Revenue with Artists

"There are equity stakes in some streaming services for which we have not paid," acknowledged the major's CEO

The battle between artists and labels over more equal profits from digital streaming revenue has just turned in the artists' favor.

According to Music Week, Warner Music Group's CEO Stephen Cooper announced during the major label's quarterly earnings call that in the event that its equity stakes are cashed in, it will begin sharing revenue from digital streaming normally not accounted for with artists in the WMG. This golden inked fine-print benefits artists with existing royalty deals with streaming services, especially Soundcloud and Spotify. Warner currently has equity stakes in both steaming services, which continue to grow; Spotify is reportedly seeking $500 million in new funding.

Cooper said: "As there is an on-going debate in the media regarding how artists should be paid for use of their music on streaming services. We wanted to take the opportunity to address this issue head on." Cooper went on to cite existing "breakage" compensation for artists, which includes "advances, minimum guarantees, non-recoupable payments, and audit settlements," that the company has written into a policy that it implemented in 2009.

However, Cooper acknowledged that artists could still be undercut, and declared that the company would tie up any loop-holes in its breakage policy: "There are equity stakes in some streaming services for which we have not paid," he said. "Although none of these equity stakes have been monetised since we implemented our breakage policy, today we are confirming that, in the event that we do receive cash proceeds from the sale of these equity stakes, we will also share this revenue with our artists on the same basis that we share revenue from actual usage and digital breakage."