Facet Records will now grant songwriters three percentage points (colloquially referred to as “points”) on every recording they release from the label’s share of the track, founder Justin Tranter tells Billboard. A songwriter with credits on hits like Imagine Dragons’ “Believer” and Justin Bieber’s “Sorry,” among others, Tranter hopes to start a trend of labels sharing master income with songwriters and to bolster “the middle class of songwriters” that they feel has “been decimated” in recent years.

Home to emerging talent like Jake Wesley Rogers, Shawn Wasabi, Shea Diamond and YDE, with today’s announcement Facet Records is “the first company in the world to make this a standard practice,” says the company founder. While already revered hitmakers, such as Tranter, can occasionally negotiate for a half or single point on the master recording, working class songwriters typically never see revenue or ownership on the master side, “unless they also produced the song,” says Tranter.

The independent label’s team opted to offer three points specifically because it will align songwriters with the industry standard already granted to producers on the recorded music side. Historically, producers earn anywhere between one to five points on a master, given their role in the recording process. The three points will never be taken out of the artists’ share of the song at Facet Records and will be shared equally with all the songwriters on a track that are not also an artist or producer.

“I figured instead of complaining and begging for change, I could fight the good fight myself first and at least do what I can to control the situation,” says Tranter. “Songwriters are the backbone of the business, the embryo, but only a few writers are living a life like mine, most everyone is left to starve.”

Earning a livable wage as a working songwriter has become harder in recent years due to a convergence of factors. In general, the publishing side of music produces less royalties than the master recording side does, but now, during the streaming era, songwriters face additional challenges. In a time of physical media like CDs, cassettes and vinyl, songwriters across all of the album’s tracks would get paid evenly for sales of full albums, meaning that even if the songwriter wrote on a less popular track, they could still see decent income, even if their song did not make it to the radio, where many songwriters say is where the real money is. The emergence of single downloads, and now streaming, has created an increasing disparity between the income generated by radio singles and a regular album track.

While artists can bolster their income by looking to brand partnerships, touring and other revenue sources, songwriters are left to pay their bills with streaming, radio and sales alone. While the Copyright Royalty Board proceedings have led to some increases in U.S. streaming rates for songwriters in recent years, many feel it is not enough.

In 2021, Tranter — along with other hitmakers like Emily Warren, Ross Golan, Tayla Parx, Victoria Monét, Savan Kotecha and Joel Little — created an advocacy group called The Pact to voice some of the issues facing the modern songwriter. Among their grievances, The Pact noted that artists who do not contribute to writing the song now expect “particularly aggressive” cuts of the publishing, something most songwriters do not have the leverage to refuse.

There are also other, more universal difficulties songwriters today have to account for, including inflation and cost of living increases, the latter of which has particularly hurt Nashville songwriters.

When asked if Facet would adjust another area of its business to account for losing the three points of income, Tranter says though they expect the change to be an “accounting headache” they add, “if I’m lucky enough to have a hit song where we own or co-own the master, that’s going to be great. I don’t need to make this up. In my opinion, labels are being greedy, they’re just being f-cking greedy.”

Tranter hopes that by opting to announce the new standard publicly that “it will inspire other labels to follow.” “We especially need the major labels to join this if we want it to be a real thing, but if it inspires other smaller labels, who can make this change quickly and overnight like I did, and it gets majors to at least have the conversation, then that’s a step forward.”