Aggregators are, to all intents and purposes, the gatekeepers of the digital realm. They are the distributors that enable you to get your own original tracks onto online platforms such as Spotify and iTunes, by paying a fee or commission. You simply cannot get your music into the marketplace without them. The power they wield is extensive, and navigating the small print in their contracts can be confusing for an independent artist without label backing.
The MU has had many requests from its members uncertain of how to negotiate their way onto digital platforms. “A lot of our musicians probably see reams of terms and conditions and feel like they have got little option but to sign up regardless,” says Naomi Pohl, MU Deputy General Secretary.
“It’s important for our members to make sure that they fully understand them before they sign up,” she says. “The problem is that on the whole the aggregators aren’t in the market of negotiating in any way. They set terms and conditions that every musician has to sign up for if they want to use their services.”
Which is why the MU has decided to review six of the most popular aggregators and provide an overview of their terms and conditions. “This shows you have a choice,” continues Naomi. “If you do decide you want to use a digital aggregator, at least you can look at our feedback and make an educated choice about which one you’d like to use. It’s important to be really clear on issues, like what the termination process is and what the pitfalls are before you sign up.”
Empowering musicians to choose the aggregator that suits them best
MU Midlands Regional Organiser Stephen Brown is the co-ordinator of the project:
“When I started developing this, it was never about telling members which aggregator to use,” he explains. “That is obviously a choice for each musician and depends on a number of factors because the services and quality vary enormously.”
“What we’re providing is a snapshot of how aggregator terms and conditions stack up against each other, as reviewed by our lawyers, P. Russell & Co,” Stephen continues.
“We hope it will allow members to decide which aggregator works for them based on getting a better understanding of what you get for your money.”
It should be noted that the MU’s Contract Advisory Service does not cover aggregators, nor does it cover the online generic terms that they or anyone else offer for services to musicians. Therefore, this review of aggregators constitutes generic and not legal advice. Stephen chose the six aggregators based on members’ feedback over the years.
There are, of course, many other aggregators out there, and there are review sites online that focus on the services each of them provide. However, none of these cover the legal terms. Members should always take everything into account when deciding on which one to go with. If you are unsure, get in touch with your Regional Office to talk it through with us.
All of these reviews – of the aggregators AWAL, CD Baby, DistroKid, Ditto, EMU and Horus – should be read in conjunction with the main standard terms and conditions available on their websites. The MU feels that most are hard to digest, some are not clearly written, and that there are contradictory elements in parts.
This may be because, as far as the MU is aware, they have never been legally challenged, or simply that this is an evolving part of the industry. The MU review represents an opinion that arises from those terms, and it may be that the aggregator meant something else entirely by them – such is the unclear way in which some are written.
The digital distribution side of the aggregators’ terms and conditions
The MU concentrates on the digital distribution side rather than other services such as publishing or sync placement. These are mostly separate services covered in any addenda the aggregator may have and usually come at extra cost. Where that additional service is present and mentioned in the terms and conditions, the MU references it in the reviews for you to check them out yourself.
For general clarification, these are the key issues that the MU’s lawyers found arising in a number of the aggregators’ terms and conditions:
- The contracts are presented to artists on a ‘take it or leave it’ basis and cannot be negotiated or changed by the artists or their representatives. The aggregators can make changes to the contracts during their term, and even if these are against the artist’s interests, they have no choice but to accept any changes. Alternatively, they could terminate the contract.
- Due to the lack of negotiation, these contracts (unlike most contracts in the music industry) are in many areas, unreasonably biased in favour of the aggregators and often exclude, to the greatest extent possible, all legal remedies for breach of contract by the aggregator.
- Artists have little choice other than to enter such contracts because they are often the only way for artists to make their recordings available on the main digital music services worldwide.
- In some contracts, the rights are expressed to be non-exclusive and allow artists to use other digital aggregators. However, in other cases they are exclusive, meaning artists cannot use anyone else to exploit their recordings on digital music services.
- Many of the contracts are badly drafted. For example, in one of the contracts the definition of ‘works’ includes ‘any musical works or sound recordings’. Therefore, although the contract is intended only for digital distribution of master recordings, it may instead acquire rights in the underlying songs, which is neither needed nor reasonable, and those rights are not paid for.
- The definition of ‘term’ is inconsistent in some of the contracts, meaning it is not certain how long those contracts last, nor how they can be ended. In one contract, the notice to terminate is stated as being both ‘one day’ and ’30 days’.
- The royalty and accounting provisions are unclear (and there is no transparency) in a number of the contracts. Therefore, it’s difficult for artists to understand the basis on which they will be paid and to calculate how much they will earn.
- With certain aggregators, several different contracts apply to the artists’ recordings (and other rights) and the terms of such agreements are in conflict and contradictory.
- In the main, none of the aggregators take any responsibility for failure of third parties to stop exploiting an artist’s recordings after the end of the contract. In some they will not even send ‘take down’ notices. This means the artist’s recordings may continue to be exploited, but without them being paid. This in turn would also make it difficult for the artist to arrange digital distribution via another aggregator.
- The aggregators take no responsibility for non-payment or failure to account by any digital service. The artists are unable to seek redress if an aggregator is not paid by any of their customers. The artist’s only contractual relationship is with the aggregator.
The MU believes these reviews will form a valuable resource for members, re-balancing the relationship between music creators and aggregators by empowering MU members to decide which companies will best suit their creative and commercial needs.
Naomi Pohl says the project forms part of a broader MU initiative. “This feeds into our Fix Streaming campaign,” she says. “We’re arguing that songwriters should generally get a better deal from streaming and a big part of that picture is the digital aggregator.”
Read our advice on aggregators
Music distribution revolution
The Association of Independent Music (AIM) also has concerns about aggregators and the dominant position they hold in the digital marketplace. In 2019 AIM published a report, Distribution Revolution, which looks at the entire landscape of 21st century distribution from the traditional physical services to aggregators.
“I’d say any musician coming into that landscape should read it to make sure they really are fully aware of what they’re being offered and whether they need it,” suggests Gee Davy, chief operating officer of AIM.
Distribution Revolution goes into a lot more detail on this – making sure you’re only signing up for those that are going to be really useful to you on a practical level.
“It may be that the distributor you’re working with is particularly strong on finding sync deals for you. So, if you’re at the point in being ready for that then that might be one to sign up for. But if they’re not so strong in that area, you’d have to get a separate sync agent and you don’t want to be paying twice for those services.”
Doing your research and understanding the pros and cons is essential before you sign on the dotted line, Davy added, saying, “know who you’re forming a business relationship with and remember that, while they may be fantastic at doing all the things you need, ending this relationship can still go wrong!
“The market may change, or your career may change direction and you might want to change your mind. You should always go in – and I say this with any business partnership, with half an eye on how to get out!”