Connect with us

Business

Beatport Freezes Royalty Payments to Rights-holders but Apologizes

facebook-profile-picture

Published

on

Beatport's headquarters, Denver. 2015. - Credits : Beatport

Yesterday evening, Beatport warned by letter to music rights-holders informing them that they won’t be paid royalties for the past quarter – from April through June – (they should normally honor a payment of royalties on Thursday, July 30th) up to SFX succeed to going private and that, even though an ultimatum requires that this to be completed by 13 August. Explanations.

[AUG. 8, 2015 EDIT]

Beatport released a memo to its label partners today promising that payments to its label suppliers will be processed next week.

A statement from Beatport to our label partners:

It was confirmed today that Beatport’s label supplier payments, which have been delayed temporarily via a hold at SFX Entertainment, will be processed next week. We deeply regret any hardships this delay has placed on members of the creative community – especially independent labels and artists, who are the lifeblood of electronic music culture and who have been long standing partners and suppliers to Beatport since 2004. We are truly sorry this has happened, and that we allowed payment distribution to get caught up in unrelated matters.

While the majority of payments were delayed, some payments were made before the hold went into effect, and those included payments to major labels and some labels participating in the new Beatport streaming service. This was not preferential treatment in any way, but we understand how the optics may illustrate just the opposite. Beatport is nothing without creative partners. We remain indelibly committed to serving the electronic music community and providing tools and resources for DJs, producers, and labels around the world to reach their fans and develop their careers. Anything that gets in the way of that mission must be dealt with swiftly so we can all get back to focusing on our core goals. To that end we appreciate the assistance of AFEM during the process this week and we look forward to continuing the growth of Beatport in support of the electronic music community.

In fact, the alert has been launched by label-owner Morgan Geist who – displeased by the email – and the fact that “the funds are reallocated during the restructuring process”, has decided to share it via a post on his Facebook page :

Screenshot of Morgan Geist' Facebook post.

Screenshot of Morgan Geist’ Facebook post.

Meanwhile, SFX Entertainment restructuring is set to take place in the fourth quarter of this year but nobody can tell yet when it will be completed or – more important – when rights-holders will receive their payments. Worst, SFX Entertainment (NASDAQ:SFXE) today announced that had given notice to Robert F.X. Sillerman , the Company’s Chairman and CEO, that he had until 10:00 AM. on August 13th, 2015 to prove that he could finance his promised effort to take the company private including a cash buyback of stockholders at $5.25 per share. As of mid-day Friday, SFXE was trading at $3.16 per share.

If he cannot provide sufficient proof, parts of the company might need to be sold off piecemeal : SFX Entertainment admitted earlier this week that it had sought other offers, but only found buyers interested in specific parts of the company which include Beatport and EDM festivals Tomorrowland, TomorrowWorld and Electric Zoo.

One thing is certain, the company plays its future face sharpened appetites of those competitors that are sure to jump on such an occasion when the electronic music market will exceed 7 billion euros next year.

Electronic Music Advisor, he is the founder & CEO of Soundlr. He also founded Stalwart, a cutting-edge thinking company specialized in electronic music’s industry.