Record label Sony Music Entertainment has agreed to strike off the debts of thousands of its artists who signed to the organisation prior to the year 2000.

Many of these musicians will now, for the first time, earn money when their songs are streamed on services such as Spotify, Apple Music and Amazon Music.

Sony said it could not name the eligible acts due to confidentiality agreements, but the list is said to include household names. Beyoncé, Shakira, Prince, Michael Jackson and Britney Spears are some of the most well-known Sony Music signees.

The company added that some artists who have yet to recoup their record advances stood to receive "many thousands of dollars per year".

Sony reportedly made the announcement in a letter that the company sent to thousands of artists today. The new policy, dubbed the 'Legacy Unrecouped Balance Program', falls under a new Sony initiative called 'Artists Forward' - which hopes to improve communication and transparency with creators.

The nature of record deals and record advances, especially deals curated in the 20th century, has made it sadly commonplace for artists to be unable earn royalties decades after they first signed their deals.

Music Business Weekly reports that the groundbreaking new Sony policy doesn't wipe away the unrecouped debt, but will “pay through on existing unrecouped balances to increase the ability of those who qualify to receive more money from uses of their music.”

The policy will retroactively impact royalty earnings beginning January 1, 2021.

According to Sony; artists, producers, and other qualified participants will be notified of their eligibility in the Legacy Unrecouped Balance Program in the near future.

As streaming has reshaped how music fans consume music and how royalties are generated, many in the music industry have called for major labels to put policies in place similar to Sony's new offering.

Beggars Group, an independent label group that includes 4AD, Matador, XL, and others, wipes off all unrecouped debt on artist advances 15 years after an artist’s last contractual album. Beggars founder Martin Mills encouraged major labels to institute such a policy during a 2016 speech.

Musicians typically take on debt when they first sign to a record label, after receiving a lump sum known as an advance to pay for recording studios, video shoots, distribution and other expenses. The money is then paid back after artists sell their music.

The down-side remains that many artists never earn enough to repay their advances - often because they get unfavourable royalty rates from their own record companies. And until the debt to their label is repaid, artists are not eligible to receive income from streaming, and other royalty payments.

In the past, heritage black artists have been particularly affected - such as TLC. The R&B trio. were signed to Sony subsidiary LaFace Records, but ended up declaring bankruptcy in the 1990s despite having one of the decade's best selling albums, CrazySexyCool.

“We know so many artists from the 80s and the 90s who got caught in that trap,” one Irish music industry insider told Hot Press. “They might have made two or three great albums that did well, but then they’d get a big advance. The album wouldn’t sell and so they’d be left with a big debt.

“The effect of this was that they wouldn’t get a penny from streaming until the €500k they owed had been repaid – which might be never. With this decision by Sony, artists and bands like that can now look forward to getting a decent bit of income if their tracks are being streamed. I think there’s a number of Irish bands from the 90s that will benefit from this so it is a great move – especially if the other record companies now follow suit."