{"id":84068,"date":"2021-02-24T17:00:00","date_gmt":"2021-02-24T17:00:00","guid":{"rendered":"http:\/\/routenote.com\/blog\/?p=84068"},"modified":"2024-02-21T10:53:00","modified_gmt":"2024-02-21T10:53:00","slug":"uk-music-streaming-inquiry","status":"publish","type":"post","link":"https:\/\/routenote.com\/blog\/uk-music-streaming-inquiry\/","title":{"rendered":"Apple Music, Spotify and Amazon want to help artists earn more from streaming"},"content":{"rendered":"\n

Image Credit: William Santos<\/a><\/em><\/p>\n\n\n\n

The three major streaming companies showed a willingness to discuss new changes to benefit artists, when questioned at the UK government\u2019s inquiry into the economics of music streaming.<\/span><\/h2>\n\n\n\n

The UK government’s DCMS inquiry into the economics of music streaming has been investigating whether musicians are fairly paid by streaming services. We\u2019ve been following the sessions, hoping for an outcome that puts more money in the pockets of music artists. <\/p>\n\n\n\n

In one of the last hearings before UK MPs write up their report on the streaming economy, it was finally the turn of representatives from Spotify, Apple Music and Amazon<\/a> to face questioning.<\/p>\n\n\n\n

The committee took turns trying to prise out of the execs what balance they strike between ensuring artists are paid fairly and staying profitable as companies. Elena Segal from Apple<\/a>, Amazon’s Paul Firth and Horacio Gutierrez from Spotify,<\/a> all showed a surprising willingness to engage with the committee considering the whole debate is centred on if their business models are unfair.<\/p>\n\n\n\n

Before we dive in, get up to speed on our coverage of the previous sessions in the inquiry here,<\/a> here,<\/a> here<\/a> and here.<\/a><\/p>\n\n\n\n

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Would users pay a little bit more if it meant that their favourite artists got a fairer deal?<\/h3>\n\n\n\n

Spotify haven\u2019t raised their prices in a decade. Asked if the price of Spotify subscriptions should be raised in a bid to get more money to artists, Head of Global Affairs and Chief Legal Officer at Spotify Gutierrez advocated for caution. He noted the need to strike a balance lest users turn to piracy instead, sending the music industry back to the bad old days of the late noughties. Worth mentioning here is the fact that Spotify have just announced the planned launch of a presumably more expensive HiFi tier.<\/a><\/p>\n\n\n\n

Netflix meanwhile has raised its prices, but music streaming is a different beast to video streaming. They have an exclusive catalogue, whilst the music streaming services all pretty much have the exact same catalogue. And as the music streaming execs pointed out, they are competing with free \u2013 YouTube.<\/a><\/p>\n\n\n\n

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Does everyone hate YouTube?<\/h3>\n\n\n\n

YouTube<\/a> is often the focus of complaints, as revenue from free, ad-funded music streaming is less than subscription-based streaming services as the company is protected by safe harbour laws from claims of copyright<\/a> infringement. <\/p>\n\n\n\n

Choosing her words carefully, Segal, Global Senior Director of Music Publishing at Apple said: \u201cIt\u2019s challenging to compete on an un-level playing field\u2026 [YouTube<\/a>] don\u2019t necessarily have licences for all of the music that they use, and they don\u2019t need to. <\/p>\n\n\n\n

And even if they do have licences, the amount they pay because of the way their business model is set up, and the way the tariffs work, is less.\u201d<\/p>\n\n\n\n

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Do the streaming companies agree that artists are losing money?<\/h3>\n\n\n\n

Presented to the companies was Nadine Shah\u2019s testimony,<\/a> wherein the independent singer-songwriter claimed that she doesn\u2019t make enough money from streaming to pay the rent. How do the companies feel about that, then? <\/p>\n\n\n\n

Spotify\u2019s<\/a> Gutierrez responded as diplomatically as you would expect, but warily pointed the finger at labels being the issue. 75% of streams came from major labels, and Gutierrez claimed the problem comes from how the revenues \u201ctrickle down\u201d through the intermediaries from the moment the song is streamed. Addressing Shah\u2019s comments, Gutierrez said:<\/p>\n\n\n\n

It\u2019s unfortunate that [Nadine Shah] feels that way\u2026 I don\u2019t know what agreements she has with labels and publishers. I don\u2019t know what the economic terms are with the split of the revenue that she might have agreed to with her label\u2026 I know that close to 70% of every pound that we generate gets paid to those intermediaries that represent artists.<\/p>Horacio Gutierrez, Head of Global Affairs and Chief Legal Officer at Spotify<\/cite><\/blockquote>\n\n\n\n

Spotify appearing before the UK government coincidentally came just a day after the company\u2019s Stream On<\/a> event, a livestream of announcements with plenty of hyperbole about how Spotify has transformed their artist’s lives. Musicians don’t hate the streaming model, as Gutierrez stressed, for one thing because of the \u201cability of artists to find an audience on the service.\u201d Payouts to artists continue to grow, he added.<\/p>\n\n\n\n

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What are the alternatives to the current system, then?<\/h3>\n\n\n\n

A common thread throughout the session was the fact that streaming is actually a relatively new beast, and a very different one to the old standard of CDs and radio plays. Isn\u2019t it far past the time to rewrite the rules to readdress the balance? <\/p>\n\n\n\n

The committee has been keen to investigate whether a stream counts as a sale or a rental. Deciding either way would change how royalties<\/a> are divvied up. Or perhaps the answer is that streaming is neither \u2013 in which case it’s something new entirely and therefore needs a new categorisation and formula.<\/p>\n\n\n\n

Campaigners meanwhile have been pushing for equitable remuneration \u2013 an equal split of recording royalities<\/a> between labels and artists. This is especially applicable to the radio-esque features like autoplay that streaming services offer users.<\/p>\n\n\n\n

All three companies argued that such radio features are more interactive than classic radio and it\u2019s difficult to equate the two. Segal also claimed she didn\u2019t know the \u201cdetail of the economics of broadcast radio\u201d, despite the fact that Apple Music does have its own radio stations.<\/p>\n\n\n\n

MP Kevin Brennan pointed out that by Spotify\u2019s own admission, stated by their COO Dawn Ostroff,<\/a> they seek to \u201csuck listeners away from radio\u201d. Shouldn\u2019t the artists who would have been streamed on the radio but are now being streamed online be paid what they would have from the radio? Gutierrez admitted: \u201cYes, it\u2019s not going to happen overnight, and there\u2019s no guarantees it will happen completely.\u201d<\/p>\n\n\n\n

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By Spotify's own admission they want to "suck listeners away from radio." So in @CommonsDCMS I put it to their Head of Global Affairs that if that's the market they are going after then they should pay musicians equitable remuneration like radio does. #BrokenRecord<\/a> #FixStreaming<\/a> pic.twitter.com\/NCCkvANf55<\/a><\/p>— Kevin Brennan MP (@KevinBrennanMP) February 23, 2021<\/a><\/blockquote>