The Association of Independent Music has published the first research into an alternative streaming proposal which has been modelled on the whole UK market.
AIM made the case for a new model in its evidence to the DCMS Committee inquiry into streaming.
The research into its Artist Growth Model was presented by Will Page and David Safir during AIM's How to Fix Streaming debate, the recording of which has now been posted online (see below).
Leading music experts participated in the open debate around the economics of streaming, which was attended by over 500 industry executives and professionals from across the creative industries. This included leading digital music services, proponents of the UK Broken Record campaign, trade organisations and government bodies.
AIM CEO Paul Pacifico said he believed that all involved in the current conversation about streaming are "aligned in our passion for music and our desire to see its potential fully realised – both in terms of its cultural impact – and commercial value."
Former chief economist of Spotify and PRS for Music, Will Page, and CMO expert David Safir joined Pacifico in a discussion moderated by Deviate Digital CEO & Music Week tech columnist Sammy Andrews. They presented research results on the Artist Growth Model proposed by AIM in its submission to the DCMS Select Committee inquiry on the economics of streaming and examined different propositions to improve the streaming market, exploring the current pro-rata system, the Artist Growth Model, user-centric payments and equitable remuneration.
With 80% of streaming revenues going to just the top 1% under current pro-rata streaming distribution models, AIM’s Artist Growth model seeks to counter this by distributing earnings more evenly in the market and enabling an increased number of credible niche and emerging artists to make a sustainable living from streaming. Page compared the system to a tax model, summarising the allocation of wealth as: "Tax the very rich to help the less rich, and leave everyone else unchanged.”
Those in attendance had the opportunity to see how the Artist Growth model would affect earnings for tracks across the streaming scale, for example by taking a slice of earnings from the top 20% most streamed UK tracks and spreading it among the next 30% most streamed.
This is holistic research, looking at the whole market
The Artist Growth model is the first alternative streaming proposal to have been modelled across the whole market, rather than a single platform or dataset.
Page said: “This is holistic research – looking at the whole market, not just some, regardless of what you think of it, is a huge win for the inquiry – the fact that the industry is now able to discuss policy-in-the-round. We've actually done holistic research...This is all the streams for one country, not a portion of the streams from one service. Regardless of whether you love it or hate it, that’s a giant step.”
However, Musicians’ Union general secretary Horace Trubridge challenged what this meant for performers and non-featured musicians.
“This model is just a case of rearranging deck chairs,” he said. “It doesn’t make more of the revenue that the labels receive available to performers and it completely ignores non-featured.”
Paul Pacifico responded: “I think that’s a criticism that could be levelled at all of the solutions that are being tabled, in the sense that they all look at how to divide money from a fixed pot, so you are de-facto, moving deck chairs around... The problem we’re trying to look at is the massive concentration of wealth in the head of the snake, and how we’re trying to push that to the middle market to support more emerging and niche artists.”
In his opening speech, Pacifico also touched on the topic of session musicians, saying that AIM had presented a solution.
“I believe we need to recognise the contribution of session musicians on tracks that become successful,” he said. “In fact, on that, we have presented a solution both to the BPI and to the MU that we think rewards success rather than pays for failure and that we hope to test that with them further soon.”
A question which followed focused on whether there should be a ‘minimum royalty rate’ required for labels to pay artists.
David Martin, CEO of FAC, said: “It isn’t monopolistic to suggest that all labels can and should offer a digital royalty rate of X% as a bare minimum... Even this model requires a fair digital royalty rate, so what should that rate be?”
Pacifico said: “If you’re fixated just on the royalty rate, there are many other factors in the contract that can shift against you. I think any contract between any creative person and their commercial partners, whether that’s a songwriter and their publisher, or an artist and their label, has to be reflective of the relationship they’re entering into and has to achieve balance… I think our industry needs to transition to a place where unfair bad faith practice becomes socially unacceptable, in contracts and other areas.”
To the question of whether the Artist Growth model could work alongside equitable remuneration, Safir replied: “The answer is yes it could, you could literally layer scales on top of other distributional models. There is nothing that negates other options sitting alongside this.”
But Page added that doing so would add additional complexity.
Pacifico added: “We as an industry need to start forming a view around, if we’re going to change from the current system, what are the costs and benefits of each proposed change, what are the impacts, who are the winners and losers and therefore which one do we think edges ahead and which actually should we all collectively get behind.”
Safir ended the discussion by calling for communication and collaboration on a global scale.
“There should be more roundtables, there should be more communication, let's work on this together,” he said.