Four Tet Sues Domino Records Over Streaming Royalties
Starting in 2001, Kieran Hebden, the British electronic producer who records as Four Tet, released four studio albums on Domino Records. Now, Music Week reports that Hebden has made a claim for damages against Domino over the royalty rate for the streams and downloads of many of the records that he released on Domino. Hebden and Domino haven’t been able to reach a settlement, so the case is set to go before a judge at the Business And Property Courts of the UK’s High Court Of Justice.
Four Tet signed to Domino in 2001, before the era of iTunes and Spotify, and he believes that the royalty rate for streams and downloads should be different from the rate for physical record sales. Domino has been calculating Hebden’s royalties for streams and downloads at an 18% rate, the same rate that used to apply for physical sales. Hebden and his lawyers claim that Hebden is entitled to a 50% royalty on streams and downloads, which Four Tet and his lawyers call a “reasonable” rate. Per Music Week, Hebden is “seeking damages of up to £70,000 plus costs,” and he’s also asking for a judgment on that royalty rate.
Four Tet’s legal argument covers the period where he released his first three Domino albums: 2001’s Pause, 2003’s Rounds, and 2005’s Everything Ecstatic, as well as the live album, EPs, and singles that he released under that contract. (Four Tet’s 2010 album There Is Love In You, released on Domino, wasn’t part of that contract.)
Four Tet’s 2001 contract included this clause:
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% of all royalties and fees arising from such exploitation.
Since all the major digital retailers and streaming services are based outside the UK, Four Tet and his lawyers believe that streams and downloads fall under that clause. Domino argues otherwise: “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’s lawyers also claim that Hebden has been attempting to buy back his masters from Domino and that this lawsuit is simply part of his strategy to pressure the label to sell those masters.
If the judge rules in favor of Hebden or sets a different royalty rate, it could set a far-reaching precedent for how the music business splits up its money in the streaming era. We’ve reached out to Domino for a statement, and we’ll update this post if we hear back.