Beatport will not be paying royalties to labels this quarter and will only pay 5% of streaming money for mixes, reported Music Business Worldwide today.
The music purchasing and streaming service has written to labels to inform them that it will be freezing all owed royalties until its parent company, SFX Entertainment, completes its privatisation procedures.
The royalties, that were due for payment last Thursday 30th June, were said to be held up by the company's "going private" process that had “trapped certain earned label payments”.
Beatport added that the company believed the process will be “coming to an end in the next few weeks, at which time all payments will be able to be made”.
One label owner who spoke exclusively to DJ Mag, and who did not wish to be named, said, "Over 80% of our download revenue comes from Beatport sales alone because its the most trusted download platform for electronic music. The problem for most labels is cashflow, we've been waiting for this money to pay our own outstanding bills over the last three months."
With the blocked payments covering three months of income, from April-June, the delay could severely impact the stability of dance music labels globally.
There is currently no fixed date on when payments will be made.
Read the full transcript from Beatport to its labels below.
"Since inception over 10 years ago Beatport has paid almost $200,000,000 to its label partners. Beatport's parent company, SFX, is currently involved in a 'going private' process that has trapped certain earned label payments. This process will be coming to an end in the next few weeks, at which time all payments will be able to be made.
Beatport prides itself on being the broadest and original friend of the makers of electronic music and will clear this one time obstacle very shortly. In the meantime, feel free to contact your label manager with any questions. Thank you for your patience and continued support."
[Via Music Business Worldwide]
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