Performers' remuneration in the age of streaming

In France, a historic agreement for fairer remuneration of performers on streaming revenues was signed on May 12, 2022 between the main players in the music industry, unions and collective management organizations and bodies representing performers and phonogram producers.  

This agreement, the first of its kind, is the fruit of long months of discussion and gives concrete form to the principle of guaranteed minimum remuneration for performers in the context of so-called "streaming" broadcasts, which had been introduced by the law of July 7, 2016.

Under the terms of this agreement, applicable from July 1, 2022, performers are now entitled to the following benefits:

The minimum royalty rate varies according to how the recording is used by the producer:

The basis of assessment covers all revenues received by producers from platforms, including the balance of uncollected advances and guaranteed minimum payments obtained from online music service publishers by the producer who exploits directly. When the producer entrusts distribution to an intermediary, the base includes all net sums received by the producer from his distributor or licensee for streaming exploitation.

Distribution allowances must comply with certain principles and conditions laid down in the agreement, which aim to ensure a fair approach to the setting of contractual allowances, by ensuring that they are reasonable, justifiable and specifically linked to digital exploitation. Of particular note are the limitation of rebates to 50% of the contractual rate, and the limitation of advertising rebates to 9 consecutive months on a single album.

A rate bonus mechanism must be provided for performers with exclusive recording contracts.

Where there is more than one performer, the applicable rate is divided between the different performers, according to a distribution key to be defined by mutual agreement and laid down in a contract with the producer. Failing this, remuneration is divided equally between the performers.

Finally, in the case of samplethe remuneration paid to the rights holders of the sampled recording is deducted from the rate of the minimum remuneration guarantee, up to a limit of 50% of the total amount of this remuneration.

In addition to guaranteed royalty rates, the agreement provides for the payment by the producer of a minimum advance of €1,000 gross per unreleased album. This advance, which is recoverable and offset against all sums and royalties owed by the producer to the performer (excluding fees), is not due to artists engaged for a one-off collaboration ("featuring").

When the producer is a very small company (with fewer than 10 full-time equivalent employees and annual sales of less than €2 million), the minimum advance will be reduced to €500 gross per unreleased album. The producers' collective management organizations (SCPP and SPPF) are each proposing afinancial assistance scheme to cover at least 50% of this minimum advance, in order to encourage VSE producers to pay an advance at least equivalent to the principle amount of €1,000 gross.

The agreement provides for the payment of a minimum remuneration corresponding to 1.5% of the basic fee defined in article III.2-1 of the Convention Collective Nationale de l'Edition Phonographique (CCNEP), per performer and per minute of the recording in which he or she participates.

In addition to this basic flat-rate remuneration, the agreement provides for a profit-sharing scheme in the event of the recording's success during the 50 years following its first release, in excess of 7.5 million certified listens in France. The amount of additional income will be a minimum of 20% of the basic fee received. If the 15 million listens are exceeded, the remuneration will be increased to 25% of the basic fee; 30% at 30 million listens; 35% at 50 million listens and every additional 50 million listens thereafter. These rates are adjusted proportionally if the number of musicians exceeds ten.

In principle, this remuneration must be paid to the performers concerned by the producers' collective management organizations, acting on the basis of a management mandate, via the performers' collective management organizations, subject to sufficient provision of neighboring rights under collective management on the account of the corresponding right-holder. Failing this, it is up to the producer to ensure direct payment of this remuneration to the performer concerned.

These provisions apply to all operations, whether in France or abroad, as long as the producer is a phonographic production company whose activity falls within the scope of the Convention Collective Nationale de l'Edition Phonographique (IDCC n°2770).

In view of a disagreement between the signatory organizations, these rules apply only to the exploitation of phonograms alone, not incorporated in any other protected content. Consequently, videographic exploitations are not, for the time being, concerned by the above rules.

Although French and European legislators have taken up the issue of remuneration of authors and artists for the exploitation of their works and performances on the Internet, particularly in the context of streaming, it has to be said that the implementation of rules to protect the interests of authors and artists is far from self-evident.

It took almost 6 years for performers of musical works to benefit from a guaranteed minimum remuneration for phonographic streaming only.

Today, it is the performers of audiovisual works (actresses, actors, music artists who contribute to the soundtrack, etc.) who are impatiently awaiting effective application of the right to receive remuneration proportional to the success of the work in which they have collaborated.

These issues are international and affect all territories, as demonstrated by the recent strike by American actors and actresses, who followed in the footsteps of screenwriters to obtain fairer and more consistent remuneration, correlated with the popularity of the work broadcast.

Changes in the way online content is consumed mean that we need to update the way in which authors and artists are exploited and remunerated. It is important, however, not to lose sight of the balance needed with the interests of producers and broadcasters, whose work is essential to the distribution of works, whether musical, audiovisual or of any other kind.