IMPALA calls for industry to come together to boost streaming market - and rejects equitable remuneration

IMPALA calls for industry to come together to boost streaming market - and rejects equitable remuneration

IMPALA has called for renewed collaboration across the whole music sector to grow revenues, address fairness across the digital market and develop a clear strategy on risk-taking. 

IMPALA also calls on governments to introduce new investment measures across Europe.

IMPALA’s latest board meeting, which took place in Hamburg during the Reeperbahn festival, was the opportunity for the association to review its digital strategy. It comes 18 months after the trade body’s 10-point plan to reform streaming.

The trade body's first priority remains growing digital income. Recent reports show that the recorded music market has not yet returned to pre-digital levels, and that the value of music is decreasing due to inflation and declining subscription prices in real terms. 

“The value of music needs to be reappraised if we are serious about growing the whole ecosystem,” said IMPALA. “This was the basis of IMPALA’s plan to reform streaming.”

IMPALA also renewed its commitment to closing the value gap across Europe. The association calls on EU countries which have not yet implemented the EU copyright directive to do so. Non-EU countries are invited to follow the EU’s lead to ensure a strong protection of copyright.

In terms of fairness, IMPALA repeated its call for all labels to pay fair contemporary digital royalties. The IMPALA board confirmed its opposition to “equitable remuneration” rights via collecting societies. 

“That would hurt labels’ investment capacity, damage the high growth sector of self-releasing artists, leave creators’ incomes at risk from erratic voting rights and distribution laws within some societies,” said the trade body. “This in turn would have a negative impact on diversity, something which will also be raised in IMPALA’s upcoming report on its equity, diversity and inclusion work. The risk with this approach would be an investment gap, as revenues would flow away from the recording side of the business, including of course from self-releasing artists. Streaming is core business, it is not radio.”

IMPALA has also called on the industry and governments to focus on growing the “investment stream”. Pointing to France as the best in class, IMPALA urges every country to put in place a system of tax credits, favourable loan guarantees and other fiscal tools to boost investment in the recording sector and have a strategic approach in place for growth.

IMPALA’s executive chair Helen Smith said: “We have to work together to grow the digital market and make sure all can benefit. It’s our responsibility. After weathering through a two-plus year pandemic, the whole sector is now facing a cost-of-living crisis.”

Smith added: “We also need governments to play their part. We ask member states who still have to implement the copyright directive to do it swiftly and stick to the text to ensure maximum harmonisation. We also call on the industry and decision makers to look at the investment stream and develop a key strategy that seeks to grow risk-taking in the European music sector”. 

Since IMPALA adopted its streaming plan, there have been renewed requests from artist groups, collecting societies and publisher groups to rethink the allocation of digital revenues - including demands for a radio type of remuneration (so-called equitable remuneration). 

IMPALA spoke out against this over the summer and suggested that equitable remuneration is not backed by any figures about investment or risk.

IMPALA president and co-chair of its Streaming Reform Group, Mark Kitcatt, said: “We see our job as being there to create the space around our artists for them to maximise their income, so they can realise without unnatural limits their creative dreams, and to ensure that long and healthy career paths are apparent to them. We are clear in our streaming plan that labels must step up to the mark and pay a digital royalty to all artists in line with current best practice for new signings, and we ask established services to listen to new ideas for artists to reach their fans and sell up to them. We need those services to be incentivised to offer more opportunities to fans to connect with, and invest in, their favourite artists. Streaming services which improve and diversify their offering to high value fans and boost local markets, rather than compete for free customers, will take the lead.”

Paul Pacifico, AIM CEO and co-chair of IMPALA’s Streaming Reform Group, added: “Recent government-funded studies in the UK found that artists with labels have better outcomes, in both absolute and relative terms. This kind of investment matters. Advances and royalties mean artists can be properly supported, especially in streaming. There are many different deal types available and many artists want labels for their investment, security, expertise, visibility, brand and negotiating power without losing money unnecessarily in admin fees to collecting societies. There is also a vast part of the market that is-self releasing – the biggest in terms of numbers and fastest growing.”

IMPALA’s Helen Smith concluded: “Equitable remuneration would damage both models and impose a single solution in a business which has already diversified, giving cultural entrepreneurs more options than ever before. Lead investors in the creative process should be a key focus of all remuneration discussions. Equal is not always fair, especially if we want to avoid an investment gap.”


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