As Spotify readies for a direct listing on the New York Stock Exchange, the Worldwide Independent Network (WIN) has challenged the major music companies to share their windfalls with the indie labels they distribute and those artists on their books.

As previously reported, all three major labels have now committed to sharing revenues from the sale of Spotify shares with the artists signed directly to their companies. Sony Music Entertainment, Warner Music, Universal Music Group have stakes in the streaming music giant which could generate a fortune for those organisations when Spotify floats later this month. But more of the cash needs to trickle down to the indies, says WIN, which is urging the majors to give a fair cut to the indie labels they distribute.

According to WIN, the London-based global organization that represents the interests of the independent music community, there’s a sense of “growing concern about their share of these revenues” ahead of Spotify’s listing, which could value the streaming company at almost $20bn and generate sums in the region of $1bn for each of the majors. So this week, WIN unveiled a new initiative to add to the signatories of the Fair Digital Deals Declaration, a voluntary commitment made in 2014 by indie label signatories around the globe to treat artists fairly in agreements with third parties relating to the digital distribution of their works.

In a statement WIN said, “All three major labels have committed to sharing revenues from the sales of Spotify shares with the artists directly signed to their companies but WIN has further called on Sony Music Entertainment, Warner Music and Universal Music Group to give the independent labels distributed by them, and therefore those artists they represent, their corresponding share of any payout received.”

Over the next few weeks, the independent trade bodies around the world, including AIR, will be encouraging new member label signatories and a re-commitment from current signatories to the Declaration.

Reports out of the U.S. this week suggest Sony Music has confirmed it’ll share that cash with its distributed labels, though Sony Music and UMG remain quiet on the matter.

WMG and UMG are understood to have stakes in Spotify in the 5 percent region, while Sony has a 5.7 percent stake, currently worth more than $1bn. Merlin, the independents’ digital rights agency, also holds a small stake.

With the forthcoming Spotify listing, notes Alison Wenham, CEO of WIN, the signatories to the Declaration have the “perfect opportunity to reiterate their position,” and more labels are expected to sign up in the weeks ahead. “We are fully focused on ensuring a sustainable economic relationship between the independent recorded music industry and the artists it represents,” she says.

Adds Martin Mills, Beggars Group, Founder and Chair of WIN: “It is entirely appropriate that independents, who have given birth to every significant new musical movement over the last 70 years, should have taken the lead in committing to fair and reasonable treatment of all artists and application of contract terms as the digital era continues to move into uncharted waters.”

WIN’s reiterated its disapproval of certain practices “which leave artists under-recompensed and under-informed in the digital marketplace” and the organization vows to present a united front with the artist community “to counter these practices.”

The full text of the Fair Digital Deals Declaration appears below.

We will:

  1. Ensure that artists’ share of download and streaming revenues is clearly explained in recording agreements and royalty statements in reasonable summary form.
  2. Account to artists a good-faith pro-rata share of any revenues and other compensation from digital services that stem from the monetization of recordings but are not attributed to specific recordings or performances.
  3. Encourage better standards of information from digital services on the usage and monetisation of music.
  4. Support artists who choose to oppose, including publicly, unauthorized uses of their music.
  5. Support the collective position of the global independent record company sector as outlined in the Global Independent Standard.

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