Labels are waking up to the news that their Beatport royalty payments from the April to June are “trapped” due to parent company SFX going private again.
Independent labels and artists have begun to receive emails from Beatport explaining that their main source of income from the last 3 months is trapped until parent company SFX buys back its share and goes private again having failed to successfully float on the stock market in 2013.
“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.”
Obviously it’s not a good situation for small labels, which are relying on payments – often 90% of their digital revenue – to stay afloat.
If SFX’s Robert Sillerman (left) can’t raise the funds to buy back all of the remaining shares, SFX might have to sell-off its assets, including Beatport, to bring SFX back to private ownership.
In other Beatport news, it has been revealed that if artists sell their mixes on Beatport they will only see 10% of the purchase fee and a measily 5% if it is streamed.