Four Tet is claiming damages against Domino for a historic royalty rate applied to downloads and streaming revenue of his music first released in the noughties.
Kieran Hebden, who performs under the Four Tet moniker, alleges that the label is in breach of contract over its 18 per cent royalty rate (which Domino applied to record sales) and that a “reasonable” rate of 50 per cent should have been given to downloads/streams.
In legal documents seen by Music Week Hebden and his lawyers have argued that “a reasonable royalty rate…has at all material times been at least 50 per cent”. The contract itself, signed in February 2001 long before the proliferation of streaming platforms and the first iPod, stated that record sales are subject to a royalty rate of 18 per cent.
However, one clause in the contract reads: “In respect of the exploitation of the Masters and any videos embodying the Masters and received by us from our licensees outside the UK we shall credit your audio and audio-visual royalty accounts respectively with 50 per cent of all royalties and fees arising from such exploitation.”
Hebden’s case states it “will contend that a reasonable royalty rate in respect of revenues derived from exploitation by way of streaming and/or digital download under the implied term of the 2001 Agreement has at all material times been at least 50 per cent; Four Tet’s position as to the precise rate is reserved pending evidence and/or expert evidence on this issue.”
Domino has rejected Hebden’s claims in a defence document submitted by Blackstone Chambers’ Tom Richards. Richards previously acted for Parlophone in legal claims over digital royalties brought by Radiohead and Marillion.
The case is set to be tried by a judge at the Business and Property Courts of the High Court of Justice.
Four Tet is seeking damages of up to £70,000 plus costs over the claim for historical streaming and download royalties as well as a legal judgement on the 50 per cent rate. Hebden’s lawyers have argued that for all download and streaming services operating outside of the UK a 50 per cent rate would be applicable.
Domino has rejected that claim and highlighted a separate clause in the 2001 contract. “In respect of records sold in new technology formats other than vinyl, Compact Discs and analogue tape cassettes the royalty rate shall be 75 per cent of the otherwise applicable rate.”
With that in mind, digital downloads (including streams) were considered a new technology format and therefore Hebden was only entitled to 75 per cent of 18 per cent of the dealer price (i.e. a 13.5 per cent royalty rate). The label, however, has paid the full 18 per cent on a discretionary basis.
“Streaming was not, as at the date of the 2001 Agreement, a mainstream method for the lawful distribution of recorded music and was not as at that date within the contemplation of the parties,” Domino added in its defence.
Four Tet provided Domino with three albums under his 2001 contract: ‘Pause’ (2001), ‘Rounds’ (2003) and ‘Everything Ecstatic’ (2005), as well as one live album, two EPs/mini-albums and eight singles.
The news comes as regulators, industry figures and the government continue to scrutinise streaming remuneration for artists as part of the Department for Digital, Culture, Media and Sport (DCMS) Commons Select Committee’s inquiry into the matter.
Findings released last month saw MPs calling for new legislation that “enshrines in law [artists’] rights to a fair share of the earnings” to address the inequality in payments received by artists.
Recommendations from the inquiry also included calls for government to legislate so that performers “enjoy the right to equitable remuneration for streaming income”.