The music industry is weighted against artists, with even successful pop stars seeing “pitiful returns” from streaming, a committee of UK MPs has said.
They are calling for a “complete reset” of the market, with musicians given a “fair share” of the £736,5 million that UK record labels earn from streaming.
In a report, they said royalties should be split 50/ 50, instead of the current rate, where artists receive about 16%.
The findings came after a six-month inquiry into music streaming.
“While streaming has brought significant profits to the recorded music industry, the talent behind it — performers, songwriters and composers — are losing out,” said Julian Knight, MP, who chairs parliament’s Digital, Culture, Media and Sport (DCMS) committee.
“Only a complete reset of streaming that enshrines in law their rights to a fair share of the earnings will do.”
The findings will be seen as a victory by pop stars like Mick Jagger, Paul McCartney, Melanie C, Wolf Alice and Jessie Ware, who recently called on the Prime Minister to reform the way musicians get paid when their songs are streamed.
Musician Tom Gray, whose #BrokenRecord campaign prompted the inquiry, said he was “overjoyed” by the findings.
“It feels like a massive vindication,” he said. “They’ve really come to the same conclusions that we’ve been saying for a very long time.”
The BPI, which represents the UK recorded music industry, was more cautious.
It said streaming was “enabling more artists than ever” to earn a “long-term, sustainable income” and that new policies should be properly examined to ensure against “unintended consequences for investment into new talent”.
How do artists get paid at the moment?
At present, Spotify is believed to pay between £0.002 and £0,0038 per stream, while Apple Music pays about £0,0059. YouTube pays the least – about £0.00052 (or 0,05 pence) per stream.
All that money goes to rights-holders, a blanket term that covers everything from massive record companies to artists who release their own music. That money is then divided up between everyone involved in making the record.
Often, the recording artist will only receive about 13% of the revenue, with labels and publishers keeping the rest.
Artists who release their own music, or who work with independent labels and distribution companies, tend to get a higher share.
A survey by the Ivors Academy and Musicians’ Union found that in 2019, 82% of professional musicians made less than £200 from streaming, whilst only 7% made more than £1 000.
The hearings were full of testy exchanges. Some witnesses said they were scared to speak out for fear of reprisals; and the head of one record label was described as “living in cloud cuckoo land” after he claimed artistes were happy with the music streaming model.
Mercury Prize nominee Nadine Shah made headlines after telling the committee she had been forced to move back in with her parents because “earnings from my streaming are not significant enough to keep the wolf away from the door”.
Pop songwriter Fiona Bevan revealed she’d earned just £100 for a track on Kylie Minogue’s number one album, Disco. “Right now, hit songwriters are driving Ubers,” she told MPs. “It’s quite shameful.”
Chic’s Nile Rodgers said that the finances of streaming are shrouded in secrecy, adding: “We don’t even know what a stream is worth and there’s no way you could even find out what a stream is worth, and that’s not a good relationship.”
The three major labels — Sony, Universal and Warner Music — faced some of the toughest questioning of the inquiry, and were accused of a “lack of clarity” by MPs.
They largely argued to maintain the status quo, saying any disruption could damage investment in new music, and resisted the idea that streaming was comparable to radio — where artists receive a 50/ 50 royalty split.
“Streaming is 24-7 in every country in the world, you can listen to the greatest record store ever – it’s clearly a sale, it’s not radio, it’s on-demand,” said Joseph, CEO of Universal Music UK.
Representatives from the streaming companies suggested they were “open-minded” about changing the royalty system, but noted that 70% their income already goes to labels, publishers and artists.
“It is a narrow-margin business, so it wouldn’t actually take that much to upset the so-called apple cart,” said Apple Music’s Elena Segal. — BBC