Music in Parliament. What’s Going On & Why It Matters

Streaming has saved the Music Industry… or has it?

After over 2 decades of digital music piracy, streaming was welcomed with open arms as a solution to the problem, saving the recording industry which was in sharp decline. Streaming helped record labels finally turn a profit again and now accounts for 75% of the industries revenue (J. Garsd, 2020).

But has this success trickled down to the artists who are the foundation of the music industry? Unsurprisingly no. Given the decimation of the live music industry due to the ongoing pandemic, the only income many musicians have left is that derived from their recorded music which is mostly consumed via streaming.

There has been large amounts of backlash in the music industry recently as the economics of streaming have come under sharp scrutiny, with the British Parliament Culture Select Committee launching an inquiry into Digital Streaming Platforms (DSP’s) and the Union of Musicians launching their ‘Justice at Spotify’ campaign. One main points here is equitable remuneration, as well as financial transparency.

Whats Going On?

Earlier this year, following the #fixstreaming and the #brokenrecord campaigns, the British parliament culture select committee launched an enquiry into the economics of streaming. They are specifically looking at the business model employed in streaming, and the effect this shift to streaming as the dominant form of music consumption has had on artists and songwriters (C. Cooke, 2020). This is part of the ongoing debate on the fairness of streaming, which has gained much needed momentum due to the Covid-19 pandemic, where most musicians have lost other income sources, especially live music. Musicians are claiming that they do not receive fair payment for the use of their recordings, and the committee noted that despite the fact that streaming “currently accounts for more than half of the global music industry’s revenue…artists can be paid as little as 13% of the income generated” (C. Cooke, 2020).

In his book ‘Dissecting the Digital Dollar’, Chris Cooke (2018) looks at how digital income is approximately split. The results are very worrying, with DSP’s retaining 30%. This is based on physical retail models, however the question of whether this is valid in the digital domain is debatable. The labels receive 46.4% of the pot while artists are left with 11.6%, and songwriters and publishers with 8.4% and 3.6% respectively. Already we see a massive imbalance in the value of the 2 copyrights involved, with mechanicals/master rights being given favourable treatment to the song/composition rights. This leaves songwriters much worse of than artists, who are not coming off well either.

To add to this, artist royalties are paid via intermediaries such as the labels which could impose further deductions or recoupment (as per their agreement with the artist), and the formula of calculating royalty allocations is not very transparent, meaning that indies and DIY artists are in a much worse position than the majors.

Why It Matters.

There are several issues concerning musicians that we must explore. Firstly, we can see from the figures above the disproportionate valuation of the two main copyrights (song and master), meaning that songwriters will require more streams than artists to make the same amount of money. We must remember that without the songwriter, there is no song.

As we explored in a previous post (How Much Do Musicians Make From Spotify In 2020?), seemingly successful artists themselves struggle to make money despite large metrics. This was emphasised in one of the DCMS committee hearings where artist Nadine Shah claimed that she cant pay rent despite having 100,000 monthly streams in Spotify (D.Smith, 2020). If established artists are struggling to earn money from their work, this is not good news to up and coming artists or those in less mainstream or more niche genres. In regards to songwriters, Fiona Bevan stated in the second hearing “I recently had a song on a UK number one album, the fastest-selling solo artist album of 2020 [Kylie Minogue’s ‘Disco’], and it will surprise many people that, from what seems like an incredible success, I have only earned £100” (C.Cooke, 2020). It is evident from these two cases that artists and songwriters aren’t getting fair pay for their work. The focus of the hearings being about equitable remuneration, basically fair pay for fair work.

On the point of transparency, Nile Rodgers stated, despite having a good relationship with his label and considering them his partners, “… every single time I have audited a label, I have found money – and sometimes it’s staggering the amount of money. And that’s because of the way that the system was designed right from the beginning with all of these relationships between the labels under NDAs [non disclosure agreements]. We don’t even know what a stream is worth – can anyone really tell me what a stream is actually worth?” (A.Paine, 2020).

The emphasis in the hearings was on the behaviours of labels rather than DSP’s. It was noted in the primary hearing that some artists were nervous of criticising the current streaming business model because they still need the support of streaming platforms and/or major labels (C.Cooke, 2020). This says a lot about the amount of power and influence that the labels have, and certain nefarious practices they may employ. The DCMS committee chair Julian Knight reassured artists by warning the industry against interference with any witnesses, saying that he will name and shame anyone trying to stop artists from speaking out about streaming (C.Cooke, 2020).

In regards to music consumers, an issue that we must discuss if the ongoing devaluation of music. Tom Gray mentioned in a committee hearing that “…music has been devalued by 26% in the streaming system”. This was further emphasised when Guy Garvey commented on the static price of music streaming ($9.99/month average) by saying “Anybody who weighs up the effort and the time that goes into making their art and into making these recordings… No, you shouldn’t really have it in your pocket for £10 a month.” (A.Paine, 2020). This raises the question of how much music is really worth and how much fans are willing to pay to musicians. This also raises serious issues regarding the sustainability of the current model, which seems to be making a career in music as an artist or songwriter much more difficult than it already was.

The Solution and the Future

The question of how effective the Parliament Committee will be at fixing streaming is debatable. The internet has allowed truly international business to become fully realised and as such they will require fully international solutions. Even if the UK manages to amend some of their laws to encourage fair practices in streaming, whether this can be implemented and enforced globally is another issue.

Nadine Shah is optimistic saying “I truly believe that it’s entirely possible to fix streaming, and to make it work for everyone – the labels, the streaming platforms and the artists.” However this was countered by fellow artist Tom Gray claiming “the big, powerful major labels… won’t let equitable remuneration into streaming, because it will eat into their margins. (A.Paine, 2020).

When you see an artist like Bob Dylan sell his catalogue to Universal, and fellow artist David Crosby selling his catalogue claiming “its my only option…streaming stole my money” (T.Ingham, 2020), it is very clear that there is a major problem. Whether Parliament will be successful at changing the streaming model is yet to be seen, but for the time being it is fair to say that the current model is not sustainable for artists and will need to change.

As always, please like, share and comment to let me know what you think!

#music #musicbusiness #musicindustry #weareviable #ukmusic #musicians #spotify #streaming #musiclaw #parliament #fixstreaming #brokenrecord

Bibliography:

J. Garsd, 2020, Marketplace, https://www.marketplace.org/2020/02/07/streaming-rescued-record-labels-but-has-it-abandoned-artists/

C. Cooke, 2020, CMU, https://completemusicupdate.com/article/parliaments-culture-select-committee-to-investigate-the-economics-of-music-streaming/

C. Cooke, 2018, Dissecting the Digital Dollar, 3rd Edition

S. Shah, 2020, The Truth About Music Blog, https://thetruthaboutmusic275774834.wordpress.com/2020/11/16/how-much-do-musicians-make-from-spotify-in-2020/

D. Smith, 2020, Digital Music News, https://www.digitalmusicnews.com/2020/11/27/nadine-shah-spotify-royalties/

C. Cooke, 2020, CMU, https://completemusicupdate.com/article/performer-er-certain-to-be-debated-once-again-at-second-parliamentary-hearing-on-streaming/

C. Cooke, 2020, CMU, https://completemusicupdate.com/article/performer-er-in-the-spotlight-at-first-parliamentary-hearing-on-the-economics-of-music-streaming/

C. Cooke, 2020, CMU, https://completemusicupdate.com/article/culture-select-committee-chair-says-he-will-name-and-shame-anyone-trying-to-stop-artists-from-speaking-out-about-streaming/

A. Paine, 2020, Music Week, https://www.musicweek.com/digital/read/dcms-committee-chair-julian-knight-warns-industry-on-interference-with-streaming-inquiry-witnesses/082076