December 15, 2018 / 9:29 PM

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SFX, Beatport Apologize For Suspending Label Royalty Payments

 

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Beatport and its parent company SFX have apologized for suspending royalty payments to labels and rights holders from money earned on the website. In a memo sent out to rights holders and labels, SFX Chairman and CEO Robert F.X. Sillerman said he was "deeply embarrassed" about what happened and promised to have payments processed next week.

The electronic music digital store and streaming service announced the move to suspend royalty payments last week. Beatport justified suspending royalty payments last week because its money was "trapped" as a result of SFX's continued privatization and share buy-back efforts. This caused an outcry from label owners, rights holders and content creators who were afraid of going for weeks or even months without receiving payments on their good sold and streamed in the store.

The store backtracked some this past week by restoring payments to major labels and a few others participating their streaming service program. However it left out most independents, causing an even larger uproar about a perceived unfair treatment towards the little guy by SFX.

Now the situation appears to be nearing an amicable solution as Beatport is forced to cave to public pressure about suspending payments. SFX still continues to deal with a difficult privatization plan that has seen a major investor jump ship recently.

Read the full letter below sent out by SFX and Beatport to their label partners via Billboard.

Payment Status Update

Dear [Rights holder],

"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."

Robert F.X. Sillerman, Chairman & CEO, SFX Entertainment

"I regret that unrelated elements made Beatport delay some payments for the first and only time in its more than 10 year history. The way we handled this was inexcusable and should never have happened. The thousands of creators who have made Beatport what it is today deserved better, and I am deeply embarrassed, both personally and professionally, by what has happened."

Mark Lawrence, CEO, AFEM

"It's been a difficult and delicate few days leading up to this positive outcome. I can't commend Beatport enough for the way in which they have handled the resolution and I am pleased that AFEM was able to support both its member labels and Beatport."

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