Domino Records settles Four Tet dispute, upping royalty rate from 18% to 50%

Streaming battle ends in new royalty rate and big payout for Four Tet

Domino Records has settled its legal battle with Four Tet over streaming, offering to up payments from 18% to a 50% royalty.

Four Tet aka Kieran Hebden, who signed with the label in 2001, had been paying him 18% of any streaming income generated by his Domino released records.

A statement on Twitter yesterday said: “I have a bodacious update on my case with Domino Records. They have recognised my original claim, that I should be paid a 50% royalty on streaming and downloads, and that they should be treated as a licence rather than the same as a CD or vinyl sale. It has been a difficult and stressful experience to work my way through this court case and I’m so glad we got this positive result, but I feel hugely relieved that the process is over.”

As well as adjusting the rate for future sales, the label agreed to pay just under £57,000 to Hebden to compensate for previous sales.

Domino argued that the 18% rate should also apply to streams, because technically speaking a stream involves a download. But Hebden countered that, because there was no specific provision for streams in his deal, the terms for licensing income should apply, which would pay him a 50% royalty. And to that end, he sued the label in a bid to get court confirmation that his interpretation of that 2001 record deal was correct.

“Sadly Domino still own parts of my catalogue for life of copyright and would not give me an option to take back ownership”, his Tweet added yesterday, adding: “I hope these types of life of copyright deals become extinct – the music industry isn’t definitive and given its evolutionary nature it seems crazy to me to try and institutionalise music in that way”.

But on the core dispute over royalty rates, the settlement is a win for Hebden. That immediately poses the question, does this set any kind of precedent that could benefit other artists stuck in old record deals? Of course, there’s no actual judgement in court here, and the sales v licence debate wasn’t argued before or settled by a judge. But Hebden’s achievement motivate other artists in similar situations to push for a better deal?

The fact that Hebden’s settlement is public is key, because when labels do out of court settlements with artists aggrieved by old contracts those settlements are usually NDAed to the sky, meaning no one else can know what was agreed and therefore what is possible. That the outcome of the dispute is public was important to Hebden, Patel added in his statement yesterday. “Importantly for Kieran, it was not a confidential settlement, meaning he could share the result with others”, he said.

“I hope that Kieran’s actions and the successful outcome he has achieved will give other artists more confidence to make fair challenges”, the lawyer added. “I hope that the awareness this case has brought will also help add momentum to the ambitions of the #brokenrecord campaign”.

It has to be said, although NDAs are common with music industry settlements, some of the sales v licence disputes in the US were class actions with the resulting settlements being public domain. And while, in some cases, that did result in a nominal uplift in artist royalties on digital income, the impact was never as dramatic as some might have hoped or even expected.

They said in a joint statement: “We’re delighted to see that Kieran Hebden aka Four Tet’s case with Domino Records has reached a conclusion. The settlement which has been agreed reflects the fact that legacy recording contracts are not fit for purpose in the digital era”.

“That record labels continue, unilaterally, to apply analogue contract terms to streaming is inappropriate, unfair and legally questionable”, they added. “Other record labels must use this opportunity to act on modernising the royalty rates which artists receive for the exploitation of their work in the digital landscape”.