BPI argue streaming already works better, label cuts are diminishing artist profits

Image Credit: BPI

During an ongoing inquiry by the UK government into the economics of the still-fairly-fresh music streaming model, the BPI have claimed that streaming may already be an improvement on physical music and warn against too radical an upheaval.

The UK government’s inquiry has seen them take a deep look into how music streaming has rapidly changed such a massive industry in just over a decade. Previously they have entered big name artists like Nadine Shah and members of Elbow and Radiohead into the discussion whilst the second session saw Chic guitarist Nile Rodgers argue that the streaming model may be more sustainable for more artists if they had a fairer split with their labels.

In the run up to the latest committee discussion on how to make streaming work for everyone – which you can read our in-depth coverage of here – the British Phonographic Industry (BPI) weighed in on the matter with a similar sentiment to Rodgers. In fact they used some interesting new stats to make the claim that streaming may in fact be a more successful route for artists than physical records used to be.

How many rise to the top

One of BPI’s major arguments for the current model of streaming is that, based on recent date, more artists are technically being listened to more than they were in 2007 when streaming started to really step on the stream.

Here’s how they’ve worked that out:

In 2007: 1048 artists achieved a total of 10,000 units (albums) sold in the year.

In 2019: 1800 artists achieved more than ten million streams in the year, equivalent to selling 10,000 physical albums.

This is based on data in the UK and suggests that streaming has given an opportunity to many more artists to be heard on a much larger basis. Of course, it could be counter-argued that 2007 was a strong peak in music piracy and had seen album sales dwindle heavily in the preceding decade.

Artists are getting a better share (sometimes)

We know full well at RouteNote how digital music has helped democratise the music industry in favour of independent artists and labels. At RouteNote we have been working with artists and labels to get their music on digital services all around the world for free with 85% of the profits going straight to them, or with our market-leading Premium plan offering artists 100% of their profits for a small upfront cost.

The shifting industry has also led to changing percentages between artists and labels, even with the majors. Many deals are more significantly in the favour of the artists since streaming has become the primary source of music revenue (70% of UK music consumption in 2019). However, that does not mean that the deals are necessarily fair; Labels no longer have to cover the same costs involved in pressing physical music and shipping it worldwide, for example. This is also not the case for all artists.

“Artist rates in streaming commonly range between 20-30% – compared to CD era rates typically at 15-20%”

BPI

Following the fallout of music piracy and its devastating effect on music revenues in the early 2000s, streaming services have revitalised the music economy once more. The issue for many is finding the balance in those revenues as regards to what goes to the platforms for enabling it, the percentage the label gets for representing the artists, and finally the artists themselves.

Many, including the BPI, argue this is the biggest point of contention in making streaming a fairer model for all. They state: “Artists are receiving a higher share of revenues nowadays than they did in the CD era. As acknowledged by witnesses who have already appeared before the select committee., artists royalty rates are typically higher in streaming, commonly ranging between 20-30% – compared to CD era rates more typically at rates of 15-20% of net Published Price To Dealer (and subject to deductions).”

How do me move forward?

There are plenty of discussions to be had about how to make music streaming viable for everyone involved and it’s not simply as straightforward as pointing at streaming platforms or pointing at the major labels, and saying that they have to change.

The BPI say that they “believe strongly that, rather than changing a model that is working well for so many, the focus should be on continuing to grow revenues from streaming and music consumption generally for the benefit of the wider music community, including artists and songwriters”.


The UK Parliament have just released the written evidence given by numerous sources, including the BPI, regarding their current sessions and discussions on the topic. You can view all of the submissions and read them in full here – be warned, there is a lot of content.

Writing about music, listening to music, and occasionally playing music.

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