At SXSW in Austin this year, Sean Parker attempted to explain that artists are not receiving a much money from his company, Spotify, because their labels are ripping them off. Parker states that by the terms of the artists’ recording agreements the labels are getting the bulk of the take from Spotify. In making the bold and apparent omnipotent statements on stage in Austin Parker went on and predicted a war between artists and their labels. "There's blood in the water for labels” Parker stated.
Recording Agreements are drafted in favor of the labels because the agreements are drafted by the label attorneys. This is not a concept unique to the recording industry. It is assumed in any business or other endeavor that the drafting party will have the agreement slanted in their favor. Hello-o! The idea is that the other party will then negotiate the agreement and insist that certain provisions be modified to be more reflective of their interests. Not all recording agreements are the same—especially after negotiation and weighing all the factors that give one party or the other leverage. I have been practicing entertainment law over 30 years and have negotiated and seen enough to know what I am talking about. Parker hasn’t been alive much longer than that.
Oh – and are we really supposed to pay any attention to Sean Parker’s excuse for his company not paying artists enough? Laughable if not astonishing at best. This is the guy whose first business success was based on not paying artists anything for use of their music (Napster). What a joke for him now to point the blame finger at somebody else for his continuing methodology of screwing artists, songwriters, producers, musicians and others in the recording industry.
Here’s a bit more reading: