The streaming service is also squeezing artists with a tiny 5% payout on streamed mixes.
Beatport has told labels not to expect their owed royalties for the past quarter until its parent, SFX Entertainment, completes its transition back to a private company.
In a letter to rightsholders obtained by MusicBusinessWorldwide, Beatport said the “going private” process had “trapped certain earned label payments”.
The company expects the process to come to an end “in the next few weeks, at which time all payments will be able to be made,” it added.
The frozen payments were due on June 30 and cover three months of income, from April to June. It’s a significant temporary loss for smaller labels in particular, where problems with cash flow can quickly cause major delays and losses.
New Jersey DJ Morgan Geist, aka Storm Queen, shared his letter from Beatport in a Facebook post, adding: “Beatport can’t seem to pay artists or labels on time right now. Couldn’t seem to find the word ‘Sorry’ in this email.”
SFX Entertainment, which operates Electric Zoo, Tomorrowland and Ruhr-In-Love among other major EDM festivals, floated on the stock market in 2013 but struggled to live up to expectations after a series of big acquisitions, reporting a net loss of $131 million in 2014.
Beatport has also revealed the royalty cut it is offering to DJs who upload their own mixes onto the platform – a new sideline for the streaming service as it squares up to SoundCloud. According to Beatport’s terms and conditions, mix creators will receive 10% of a download sale and only 5% of income from a stream.
That figure includes all the rights, as MBW reports. Beatport’a T&Cs explain: “[This] royalty is your sole compensation and includes all payments due to you in connection with the Content, including any mechanical royalties, public performance monies, or other music publishing monies to which you may be entitled as a writer or composer.”
Last month Beatport revealed a partnership with Spotify to bring exclusive content from the EDM world to the larger streaming platform.