You wouldn't be surprised if I said that music streaming and online music sales have been the main focus for record labels and their teams. Since they’re relying on these streams of revenue, it exacerbated a hard itch for artists: Equitable remuneration, or otherwise called public performance royalties.
In a world amidst a pandemic where live concerts are outright banned, music streaming has become one way to help the music industry stay afloat. However, artists find themselves sinking as they find very little returns from their songs being streamed.
This has been a recurrent discussion among the music industry main actors. And the reason why we’re bringing it up to you that the UK government had started the Streaming Inquiry a while ago. And a few weeks back, they held their first hearing.
What is the UK Parliament aiming for with the Streaming Inquiry?
One of the major battlegrounds over remuneration is in the UK. The #BrokenRecord campaign started around Tom Gray, the frontman of Gomez, winner of the Mercury Prize. His goal: a fair remuneration for artists, from music streaming. Since the business model on these platforms had never been built to support a livelihood for artists, the pandemic highlighted already well-known issues. #BrokenRecord is then focused on seeking greater benefit for artists from streaming royalties.
The campaign has grown pretty large, benefitting from a momentum, but also thanks to many online from artists and music professionals. The UK Parliament has brought together several hearings over the issue. In November of 2020, Tom Gray and many other leaders in the industry spoke to Parliament over the predicament of streaming and royalties in the UK.
Tom Gray stated in the earliest interview, “A big survey across Europe of all performer artists put the amount that is made per annum from streaming at around £900.” This is a startling figure when we can consider the billions of dollars Youtube, Spotify, and other platforms pay to record labels.
Because of the contention and legal issues involved, the UK Parliament called a Streaming Inquiry from all the major participants in the industry.
What happened during the Streaming Inquiry in 2021?
In the latest hearing of January 21st, the UK Parliament published the full inquiry, involving some of the biggest record labels, music streaming companies and rights holders in the music industry. Legal writers had spent a day hearing these actors’ reports. To save you some time, we gathered a few takeaways.
#BrokenRecord’s submission ultimately suggested expanding on a current UK legislative measure called “Equitable Remuneration” that would cover radio and television broadcast to include music streaming. Here is a part of their statement: “This would guarantee an income stream for artists irrespective of contractual terms and guarantee all recording musicians (whose work is listened to) some income from streaming for the first time.” Tom Gray also continues to point out the music industry’s profit margins have grown in the last 20 years, even using a quote from Rob Stringer, the CEO of Sony Music as a direct statement.
BPI in their submission goes along with an idea that music streaming is more akin to marketing, “labels play a vital role in creating a virtuous cycle reinvestment and growth.” In their view, streaming is much like advertising as opposed to a profitable platform. If the artist performs well, the record label will be more likely to “reinvest” in them. They also warn that “policy intervention” should only be used if there are failures in the music industry.
A few players have stated some warnings about streaming security and loose regulations in place. The Ivors Academy was very focused on how creators’ lack of transparency behind these music streaming platforms. The Beggars Group focused on how streaming platforms limit an artist’s music down to particular songs within an algorithm that can limit exposure and interest in overall record sales.
Finally, Youtube submitted written evidence defending User-Generated-Content platforms as profitable entities, stating: “we’ve paid out over USD$12B to the music industry from our advertising and subscription businesses as of January 2020.” They suggest developing more advanced anti-piracy solutions to help generate more revenue for creators and artists.
What impact could this Streaming Inquiry have overall?
It is obvious that music streaming will have to undergo some major changes to better handle the current era in the music industry. The UK Parliament’s actions could become a landmark decision for this business model, in the long term.
One can dream: if the UK Parliament finds that artists’ music streaming rights should be under the current “Equitable Remuneration” legislation, revenues could subsequently increase. One thing is sure, both sides have proven that there is enough money in music streaming to supply extra revenue towards artists. However, it will come down to the UK Parliament to put further regulations on the music industry with a heavy hand.
What does it mean for music professionals?
For now, not much. These public actions take time and we’re not even close to seeing effective decisions. But it can bring up questions about work methods. Music streaming revenues are questioned even more today because it is now an important part of revenues for the music industry. And this means digital statements piling up in your accounting database.
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