Business News Digital Labels & Publishers

Much chatter about the Beatport payments delay, as Believe confirms it will advance monies to labels

By | Published on Thursday 6 August 2015


As independent dance labels the world over invested some quality time yesterday into wondering why what is, after all, a routine acquisition of SFX by its founder should prevent the company’s Beatport subsidiary from paying out on recent sales and streams, Believe Digital announced it would be making payments due to its clients by the EDM-focused digital platform anyway, while the DSP sorts out its issues.

As previously reported, Beatport sent a memo to labels earlier this week saying that SFX founder Robert Sillerman’s bid to buy back the company – which he floated in 2013 – had “trapped certain earned label payments”, meaning that some record companies who had tracks downloaded or streamed via the service won’t see the money they are due until the SFX buy-back is complete. Which is annoying for small labels with tight cashflow, especially as any download income is linked to direct payments made by customers, unlike streaming revenue which may be loss-leading minimum guarantees in effect subsidised by the DSP.

Posting the Beatport memo to his Facebook page, producer Morgan Geist, aka Storm Queen, noted that he “couldn’t seem to find the word ‘sorry’ in this email”, while others expressed concern over what this development might mean for the future of the EDM company and the digital platform it acquired in 2013.

As also previously reported, the SFX board, while approving Sillerman’s buy-back plan, has asked for proof that he has the finance in place to buy back all the shares he doesn’t currently control at the $5.25 price point he has offered.

But for those dance labels distributed by Believe, there was some good news, with the distributor confirming yesterday that it would advance monies due by Beatport to its clients ahead of it receiving payment from the SFX service.

Believe’s General Manager UK Lee Morrison told CMU: “Obviously this is not an ideal situation for our labels and artists to be in, a lot of our clients and their partners rely on this income to actually live. Believe are in a fortunate position to be able to help them at this time and we hope the situation is resolved quickly”.