BMG's unveils results of historic catalogues contracts' review

By Emmanuel Legrand

Bertelsmann-owned music company BMG has completed the first stage of a review of its historic acquired recorded music catalogues to probe "for evidence of racial disadvantage" and establish whether it had inherited recordings subject to discriminatory contract terms for Black artists.

  The review has identified that four of the 33 labels among the catalogues it acquired show "statistically significant differences between the royalties paid to Black and non-Black artists." 

  These catalogues will now be "subject to a further deep dive study to establish definitively the reasons for those differences," said the company, explaining that regardless of the results of that study, BMG will "shortly bring forward measures which will benefit the lowest paid recording artists across all of its catalogues." 

  It added: "Given that BMG represents a relatively small share of Black music history, particularly in the US, BMG is inviting record labels with substantial catalogues of Black music to undertake similar reviews and/or assist in providing independent researchers and academics access to such information in order to establish the scale of racial disadvantage across the record business as a whole."

Racial disadvantage

  The BMG project – analysing thousands of artist royalty accounts and millions of lines of data – was led by COO Ben Katovsky. “This project has been a huge undertaking. Our focus was to establish if there were differences in royalty rates which could only be explained by skin color. While difference is not necessarily evidence of bias, there were instances of differences that are significant enough that they warrant closer attention. We will follow this through to its conclusion," said Katovsky.

  The study found that:  

  > BMG’s historic acquired recorded catalogues include recordings on 33 labels by 3,163 artists of whom 1,010 (32%) are Black; 

  > These recorded catalogues dating back to the 1960s were acquired by BMG between 2008 and 2019; BMG was not responsible for striking any of these original deals; 

  > The recorded catalogues feature 15 labels whose rosters include both Black and non-Black artists. Of those 15 labels, an examination of recorded royalty accounts showed that in the case of 11 of them, there was no evidence of racial disadvantage. Either 1) Black artists earned the same as non-Black artists or 2) there was no statistically significant difference between Black and non-Black artists or 3) Black artists earned slightly more than non-Black artists; 

  > In the case of four labels there was a statistically significant negative correlation between being Black and receiving lower recorded royalty rates, a difference ranging from 1.1 to 3.4 percentage points; 

  > To serve as a control for the review of historic recorded catalogues it has acquired, BMG applied the same methodology to the more than 800 recording agreements it has itself negotiated since it was established in October 2008; 

  > The inquiry established there was no negative correlation between lower recorded royalty rates and Black artists across those deals; As with the results for historic acquired recorded catalogs, the methodology and analysis was verified by external auditors.

Time to address the past

  BMG CEO Hartwig Masuch commented: “Since before the dawn of rock ‘n’ roll, virtually all pop and rock music has its roots in Black music. Yet music’s history books are littered with tales of discriminatory treatment of Black musicians. It is time for the music industry to address its past. Making good on our commitment to search for racial disadvantage in our historic acquired recorded catalogs has been an enormous and highly complex task. We have learned a lot and there is still more to discover. We will act on this knowledge. We invite other labels to join us in this mission – to turn the promises and hopes of Blackout Tuesday into action.”