Four Tet Kieran Hebden 1

Four Tet’s Streaming Royalties Dispute With Domino: What’s Going On and Why It Matters

Four Tet’s Streaming Royalties Dispute With Domino: What’s Going On and Why It Matters

A breakdown of the electronic producer’s UK indie label drama and how it transcends borders

Kieran Hebden aka Four Tet

Kieran Hebden aka Four Tet, February 2011 (Louise Wilson/WireImage)

In a series of emotional tweets on Sunday, November 21, Kieran Hebden revealed that his former label Domino had pulled three of his albums from streaming services. “This is heartbreaking to me,” the revered electronic producer better known as Four Tet wrote. Hebden noted that the removal of Four Tet’s first three Domino-issued albums—2001’s Pause, 2003’s Rounds, and 2005’s Everything Ecstatic—came as he was embroiled in a streaming royalties lawsuit against the venerable UK indie label that spawned Arctic Monkeys and Franz Ferdinand, adding, “I’m truly shocked that it has come to this.”

If Hebden isn’t necessarily a household name like Taylor Swift, whose pronouncements about the music industry tend to reverberate across the mainstream media, in part that’s also why his dispute with Domino could be significant. Four Tet’s battle for a bigger slice of the streaming pie arrived as UK lawmakers were mounting a high-profile debate over artists’ share of music royalties. A movement called the #BrokenRecord campaign asserted that streaming economics privileged “a rarefied few” at the expense of “a larger, secure, professional class of artist, songwriter, and performer.” As label revenues look set for record highs, the question of how to fairly divide the digital dollar has loomed large for the U.S. music industry.

“Obviously we’re all watching this case very closely,” said Charlie Anderson, a United Kingdom–based music litigation specialist who has worked with Daft Punk. “That these issues are moving through the UK court right now couldn’t be more timely.” He added, “Sadly, like cases in the U.S. that have come before, I think this one is likely to turn on contractual construction, and therefore probably won’t set any wider legal precedent that others can rely upon. But it may just sway the debate at a political and/or industry level.”

Hebden filed a claim against Domino in a London court in December 2020, as later reported by legal trade outlet Law360. The lawsuit focuses on the royalty rate that Domino owes for streams and digital downloads under Four Tet’s 2001 record contract. As also reported by UK music industry publications including Music Week, Hebden claimed that the contract suggests a “reasonable royalty rate” for streams and downloads would be at least 50 percent. Domino had instead been paying Hebden a rate of 18 percent on streams and downloads alike.

To arrive at the 50 percent figure, Four Tet’s lawyer seized on contract provisions regarding international and “flat fee” use of Hebden’s music. The deal reportedly says that Domino is obligated to pay out 50 percent of all royalties and fees received from licenses for music consumed outside the United Kingdom, as well as 50 percent of net proceeds generated by licensing recordings for a flat fee rather than a per-record royalty. Hebden’s lawyer contended that these clauses should have applied to most of his streaming and download income. (Apple, which opened the iTunes Store in 2003, is based in America while Spotify, which was launched in 2008, is based in Sweden.)

In bringing the lawsuit, Four Tet asked for damages of up to £70,000 (about $95,000) plus costs. Hebden also seeks a court judgment over the 50 percent royalty rate. If a judge determines that the contract doesn’t cover streams and other digital formats, then Four Tet should’ve received a “reasonable market rate” for them, according to the musician’s legal arguments.

As noted by UK music trade outlet Complete Music Update, the litigation fits into a long-running debate over whether digital formats represent a “sale” or a “license” under the terms of analog-era contracts. Lawsuits have been waged over this issue since the iTunes era. In 2009, Eminem’s former producers F.B.T. Productions lost one such royalty case against label giant Universal Music Group. Almost a decade later, Enrique Iglesias launched a similar lawsuit against Universal, except over streaming royalties; according to online court documents, the two sides soon reached a confidential settlement.

Four Tet’s case wasn’t visible until the middle of last year, after Domino’s February 2021 defense filing became public. Domino argued that Four Tet wasn’t entitled to a 50 percent rate for streaming royalties. The label reportedly pointed to another contractual provision that sets a rate for “new technology formats” that is 75 percent of “the otherwise applicable rate.” Domino argued that although it had paid Hebden an 18 percent rate for his digital catalog “on a discretionary basis,” it had only been obligated to pay a chunk of that. The label also reportedly asserted that the rate for streaming and downloads would be the same, contending that “a stream is always technically a download of data packets.” Plus, Domino argued that streaming wasn’t a mainstream distribution method at the time of the 2001 contract and wasn’t then being contemplated by either it or Hebden.

The matter came to a head last fall when Domino scrubbed Pause, Rounds, and Everything Is Ecstatic—reportedly the three studio albums covered by Four Tet’s deal with the indie—from services such as Spotify and Apple Music. (Four Tet’s 2010 album There Is Love in You, although initially released on Domino, was apparently not part of the same contract.) Hebden tweeted that Domino’s lawyers had “said they would remove [his] music from all digital services in order to stop the case progressing.” Caribou’s Dan Snaith, another former Domino-signed electronic artist, voiced support for Hebden, tweeting that the albums’ removal was “a desperate and vindictive act.” Snaith wrote that Four Tet was “motivated by setting a fair precedent for other artists in similar situations, rather than by his own self interest.”

A couple of UK music trade groups also weighed in on Hebden’s behalf. The CEOs of the Music Managers Forum, an association of professional music managers, and the Featured Artists Coalition, which lobbies for music artists’ rights, issued a joint statement that slams the takedown as “misguided and self-defeating.”

Following the outcry, Domino said in a statement that it was “just as saddened” about the situation. “The decision to temporarily remove the three Four Tet albums from digital services was not taken lightly,” the statement reads “We were advised to do so as a necessary consequence of [Hebden’s] litigation at this time.” Since the legal proceedings began in December 2020, according to the statement, Domino had offered to mediate but Four Tet’s camp had “rebuffed” them. “We have continued trying to re-engage with them to find a solution to this dispute: one that is fair to both sides, but to no avail,” Domino said. “Through all of this, we have been and continue to be open to discussion and mediation. While we are equally as disheartened to have to take these steps, we remain hopeful that an amicable solution can be reached in the future. Our door is now and will always be open for further discussion with [Hebden].”

After the album-removal controversy, Four Tet asked the court for permission to plead new claims against Domino. On Thursday, December 16, the two sides faced off in a hearing at the Intellectual Property Enterprise Court in London. In a brief oral judgment, Deputy Judge Pat Treacy ruled that Hebden could pursue a breach-of-contract case over the streaming takedown. The judge ruled that Four Tet can go forward with arguments that scrubbing the albums violated commitments to make the albums commercially available. Domino’s lawyer at the hearing contended that the label had no such obligation. Treacy, however, shot down Four Tet’s bid to argue that the takedown constituted a so-called restraint of trade, a legal avenue once pursued by George Michael in his own label-contract dispute.

The public disagreement between Four Tet and Domino mirrored a bigger rift within the UK music industry and Parliament. On November 24, UK lawmaker Kevin Brennan introduced a bill that was backed by the MMF, the FAC, the Ivors Academy (which represents songwriters and composers), and the Musicians’ Union, but was opposed by the UK industry groups representing both major and indie labels. Although Brennan said the bill aimed to ensure equitable compensation for performers and composers, the British Phonographic Industry and the Association of Independent Music criticized the proposals as “reckless and damaging.” The bill saw a second reading in the House of Commons on December 3, but ultimately fizzled.

Although official 2021 figures are still on the way, such disputes come as the mainstream industry has been enjoying a multi-year resurgence. U.S. recorded music revenues were up by 27 percent in the first half of 2021 alone, following five consecutive full years of growth, according to the RIAA. UK recorded music revenues also enjoyed a fifth straight year of expansion last year, albeit at a slower pace of 3.8 percent, according to the BPI. (“Success today is gauged in the multi-millions, sometimes billions of streams,” said the industry group’s CEO Geoff Taylor.) According to the latest annual disclosure from Domino, for its part, the label had a pre-tax profit of roughly £1.8 million ($2.5 million) in 2020 on revenue of £15.1 million ($20.4 million), down nine percent and 17 percent, respectively.

The Four Tet–Domino legal imbroglio is expected to go to trial sometime soon. As reported by Complete Music Update, the proceedings have played out so far in a specialized court with a limit on how much Hebden might have to pay to cover the other side’s legal costs if he loses. Domino reportedly argued at last month’s hearing, however, that the case had become too unwieldy for the Intellectual Property Enterprise Court and should be transferred to the main High Court. Four Tet’s lawyer responded that if the case is moved, Hebden “will not be able to afford this litigation.”

Four Tet’s lawyer didn’t respond to requests for comment for this story.

A representative for Domino shared the following statement with Pitchfork:

Domino are saddened to be in this legal dispute with [Hebden] and have made several offers to settle this matter, including full payment of his legal costs and the full historical sums he claimed in his litigation.

When repeated attempts to settle our differences were unsuccessful, we were advised to take the difficult decision to remove his Domino repertoire from streaming services, but not without giving [Hebden] and his legal team advance notice of our intended course of action. We are eager to reinstate these albums and remain hopeful that an amicable solution can be reached in the future. As we’ve stressed previously, our door is now and will always be open for further discussion with [Hebden].

As far as the significance of this case for the broader industry, this is a contractual dispute based on the wording and interpretation of specific clauses in one contract entered into in 2001 between [Hebden] and Domino, in respect of which [Hebden] had full and proper legal advice. [Music journalist] Chris Cooke, who attended the hearing in December, has written about the intricacies of the case (https://completemusicupdate.com/article/four-tet-allowed-to-add-new-legal-claims-over-album-takedowns-in-domino-dispute/) which we believe provides a helpful summary of events.

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