SAG-AFTRA/Labels Agree on Worldwide Streaming Deal

SAG-AFTRA and major record labels said late Thursday they had struck a deal on a successor agreement on sound recordings that includes what they call a "groundbreaking" formula for compensation for online streaming and nonpermanent digital downloads that includes revenue from outside the U.S. and on platforms including Spotify and Rdio.

The previous agreement (which henceforth will be the SAG-AFTRA National Code of Fair Practice for Sound Recordings, had expired Dec. 31, 2014, and covers "session singers, royalty artists, announcers, actors, comedians, narrators and sound effects artists who work on recordings in all new and traditional media and all music formats as well as audiobooks, comedy albums and cast albums."

The new contract is retroactive to Jan. 1, 2015 and extends through Dec. 31, 2017.

The deal is groundbreaking in part because it is the first time that a union contract has included revenue generated outside the U.S.

It is the first renegotiation of the agreement post-merger of SAG and AFTRA.

“The music industry continues to face existential challenges, which make the importance and value of our partnership with creative talent a top priority," said Bernard Plum in a statement--he was the lead negotiator for the music labels, which included Sony Music, Universal Music Group, and Warner Music Group. "We are proud to have worked with the SAG-AFTRA leadership who were willing to show the flexibility needed at this critical juncture..."

SAG-AFTRA said key elements of the agreement, in addition to a cut of  worldwide streaming and download revenues, included health and retirement contributions based on streaming payments--both here and abroad.

The deal still needs to be ratified by the union's members.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.