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SONY'S SPOTIFY STOCK PAYOUT FOR ACTS: DOING THE NUMBERS

Artists need not be recouped to participate in proceeds from Sony Music's Spotify stock sale as it continues to tout its policy for such disbursements. 

First announced in June, the Sony plan divides up the $750m the company made in April from liquidating 50% of its Spotify shares and distributes those funds to all Sony acts and affiliated independent labels, regardless of whether their contracts stipulate that they would participate in the profit-sharing. Acts need not have recouped their balances to receive some of these funds. 

The disbursement covers the 10 years of Spotify's existence.

As has been reported elsewhere, the monies are being paid out according to a formula based equally on (a) an act's percentage revenue contribution to Sony's Spotify revenue over the 10 years and (b) its contribution to overall revenue, multiplied by the act's contractually stipulated royalty rate. This equation is said to be designed to accommodate acts that earned big streams and those whose primary contribution (particularly during the early days of streaming) was in retail sales. 

Will Sony's competitors review their policies in light of this? Stay tuned.

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