The long-sensitive question about what major labels would do with any windfall from a Spotify IPO has emerged again, with the labels scrambling to stress that they would share any profits with artists.

It’s a rerun of the moment last year when all three majors revealed details of their policies on breakages in response to criticism over “black box” income sitting in their bank accounts.

Warner Music boss Stephen Cooper started the dominoes falling this time round. “In the event 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 as we share revenue from actual usage and digital breakage,” he said of WMG’s equity stakes in services like Spotify and SoundCloud, in the company’s latest financial earnings call.

WMG has since confirmed to Billboard that any such income will be shared ‘at the same rate that artists are allocated their share of streaming royalties’.

Within hours, Sony Music confirmed a similar policy. “As we have previously shared with our artists and their representatives, net proceeds realised by Sony Music from the monetisation of equity interests that were provided to Sony Music as part of the consideration for a digital license will be shared with our artists on a basis consistent with our breakage policy,” a spokesperson told MBW.

These are significant sums: if Spotify were to IPO at its current valuation of $8bn, WMG’s stake is estimated at $200m, while Sony’s could be up to $480m. So far, third major Universal Music has declined to comment, but it is coming under pressure to announce a similar approach.

“We call upon Universal to follow suit,” said Music Managers Forum CEO Annabella Coldrick last night. “Warner and Sony are demonstrating industry leadership and aligning their interests with artists by committing to share proceeds from the sale of Spotify shares.”

Other observers think that equity stakes shouldn’t become the sole focus of attention here. Consultant Mark Mulligan pointed out that with streams still treated as sales rather than licenses, that difference between a 10%-15% payout and a 50% payout to artists is notable.

“There is as strong an argument to be made for streams not to be considered as a pure license as there is a sale, but there is an even stronger one for a hybrid rate that sits in the middle,” wrote Mulligan. “Doing so would double the amount of money most artists make from streaming.”

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