Could Spotify soon be forced to review the model it uses to calculate royalties paid to artists in the UK?
That’s the big question being asked in the music industry today in the wake of the news that the country’s government plans to investigate the “economics” of music streaming services.
The ‘Economics of Music’ streaming inquiry, to be undertaken by the British Government’s Digital, Culture, Media and Sport Committee, will analyze business models operated by streaming firms like Spotify, Apple Music, Amazon Music and Google Play.
“Music streaming in the UK brings in more than £1 billion in revenue with 114 billion music streams in the last year, however artists can be paid as little as 13% of the income generated,” states the announcement.
The announcement adds that the Committee will also consider whether the government should be taking action to protect the industry from piracy in the wake of steps taken by the EU on copyright and intellectual property rights.
To carry out the inquiry, the the DCMS Committee is asking for the “perspectives of industry experts, artists and record labels as well as streaming platforms themselves”
The DCMS is inviting written submissions to be sent in by 6pm on Monday, November 16, 2020 with answers to the following questions:
- What are the dominant business models of platforms that offer music streaming as a service?
- Have new features associated with streaming platforms, such as algorithmic curation of music or company playlists, influenced consumer habits, tastes, etc?
- What has been the economic impact and long-term implications of streaming on the music industry, including for artists, record labels, record shops, etc?
- How can the Government protect the industry from knock-on effects, such as increased piracy of music? Does the UK need an equivalent of the Copyright Directive?
- Do alternative business models exist? How can policy favour more equitable business models?
Today’s news was welcomed by various UK-based music industry bodies, including the Music Managers Forum, whose membership currently stands at almost 700 managers based in the UK with global businesses and a wider network of over 2,700 managers in the US.
The Ivors Academy, which represents songwriters and composers, as well as the Musicians’ Union, also welcomed the news.
“We look forward to submitting evidence on behalf of our membership.”
Annabella Coldrick, MMF
Annabella Coldrick, CEO, MMF: “This is a welcome announcement by the DCMS Select Committee.
“Managers are at the epicentre of changes in the recorded music business, and the MMF have been at the forefront of debates around streaming through our long-running Dissecting The Digital Dollar initiative.
“We look forward to submitting evidence on behalf of our membership.”
“Most creators cannot make a living from streaming, it simply does not pay enough and millions of pounds each year is not properly allocated due to poor data.
Graham Davies, The Ivors Academy
Graham Davies, CEO of The Ivors Academy, said: “On behalf of all music creators we are delighted that Government will investigate the streaming market so it can work for all parts of the music industry.
“Most creators cannot make a living from streaming, it simply does not pay enough and millions of pounds each year is not properly allocated due to poor data.
“Following our campaigning with the Musicians’ Union, performers and creators to Fix Streaming this is an opportunity to create a transparent, fair and equitable approach.”
“We hope this inquiry will show that a more equitable model is possible and that streaming royalties can and should play a significant role in sustaining the careers of creators and artists.”
Naomi Pohl, Musicians’ Union
Naomi Pohl, Deputy General Secretary of the Musicians’ Union, said: “It is extremely welcome that the DCMS Select Committee has announced an inquiry into the economics of music streaming at a time when musicians are making very little money from live performance due to Covid-19.
“The Musicians’ Union and the Ivors Academy have been calling for a Government review because the current crisis has highlighted that the royalties generated by streaming are far too low and the market is failing the vast majority of our members.
“We hope this inquiry will show that a more equitable model is possible and that streaming royalties can and should play a significant role in sustaining the careers of creators and artists.”
The UK’s impending streaming inquiry follows the recent news of the Turkish government’s crackdown on companies operating without an internet broadcast license.
Legislation was introduced in the country last year requiring a license to be obtained to broadcast content online. The law applies to local overseas firms.
Spotify was one three companies named by Turkey’s Radio and Television Supreme Council (RTÜK) as broadcasting online without a license in a notice published on Monday (October 12), which gave the companies 72 hours to pay for a broadcast license fee for three months in advance.
The notice adds that Spotify and the other companies named can continue to “broadcast” for three months if they submit an application request and pay the fee in advance.
Failure to submit an application request or terminate their services within 72 hours following the announcement would result in “a criminal complaint” filed against those companies. The notice ends with the words “You are Warned”.
Turkish news site Sabah reports that SPOT swiftly responded to the Turkish Government’s warning, and have now been granted a license, which must mean that they paid the up-front fee.Music Business Worldwide
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