Supposedly, an anonymous source from inside Beatport told Digital Music News that the company is "highly likely" to start stiffing artists on royalty payments, specifically independent artists and labels. The source came forward so as to issue a "warning to artists and other people" claiming that they are "highly likely" to lose out on their royalties. But not so fast, Beatport has clarified what the Chapter 11 bankruptcy really means.
The situation was sparked when Beatport parent company SFX Entertainment recently filed for bankruptcy. The move by SFX wiped $300 million in debt, but questions still remained regarding it's assets. Beatport quickly responded by saying it was "business as usual" at the digital music marketplace. Now this anonymous source, who claims to be from inside Beatport, is saying otherwise.
“You’re looking at a pretty bad mess, we really don’t know how the [bankruptcy] courts are going to handle this. So all I’d say right now, is in this type of situation, there’s really no assurance that anyone’s going to getting paid,” said the anonymous source.
It's clear that nobody really knows for sure how much the SFX meltdown is going to affect Beatport, or if the anonymous source really is credible for that matter. With that in mind, we reached out to Beatport for comment and they clarified the situation.
“Both the post and the so-called source (assuming one even exists) show a fundamental lack of understanding of what Chapter 11 means. Chapter 11 is designed to ensure companies can pay their critical vendors while restructuring their debt. Labels and suppliers are a critical vendors to Beatport and are listed as so in the documents provided to the court. Beatport pays our labels quarterly, the most recent distribution taking place last week, and intends to continue doing so as usual.”
We're still not entirely sure how Beatport will be affected by the SFX bankruptcy, but from what they are saying, the Chapter 11 filing will make sure that all royalty payments are made quarterly as usual. We'll be watching this story closely as it unfolds.
Check back for more news coming soon.