Breakage deductions are a relic from the vinyl era that labels still use to shave your royalties in the streaming age. Originally it covered records broken in shipping, and labels deducted ten to fifteen percent of your royalties for it. There is nothing to break when your music streams, yet the deduction survives in countless contracts.
New technology deductions are the modern version of the same trick. Labels argue that new formats and platforms justify paying you a reduced royalty rate, sometimes half the normal rate, on income from new technology. Streaming was once classified as new technology. Every innovation becomes an excuse to pay artists less for the future.
These clauses compound quietly over a career. A fifteen percent breakage deduction plus a fifty percent new technology rate on streaming income can cut your effective royalty in half before any other deductions apply. Most artists never notice because the math is buried three pages deep in royalty provisions nobody explains.
Strike them or cap them. Demand the complete elimination of breakage deductions for digital income, and limit new technology rates to genuinely new formats with a sunset clause that restores full rates after two years. These are legacy deductions from a physical world that no longer exists. Do not let them tax your digital future.
These legacy deductions survive because most artists never challenge them, so be the exception. Bring them up in every negotiation, cite the deals that have eliminated them, and refuse to accept that outdated language is untouchable. Every deduction you kill is a permanent raise on every stream and every sale for the rest of your career.
About the Author – Ruben Burgos: Ruben Burgos brings over 25 years of music expertise and more than 15 years of model guidance to the table. He is the indie major pinnacle to retaining credits for musicians and helping them navigate this wicked industry without the fuckery.