The UK government has accepted the recommendation of the Culture, Media & Sport Committee on establishing a music industry remuneration working group.
The follow-up report by the committee of MPs was published more than two years after it launched the inquiry into the economics of streaming.
In March, the government accepted the committee’s recommendations on transparency and codes of practice. In addition, ministers have now agreed to establish a working group to explore issues around fair pay for creators in streaming, as recommended by the CMS Committee in its report earlier this year.
The announcement of the new working group was made in a letter by Sir John Whittingdale, Minister Of State at the Department for Culture, Media & Sport, to the recently elected committee chair Dame Caroline Dinenage, the former DCMS minister responsible for the music sector. The committee’s report in January called for more to be done to ensure creators and performers receive a fairer cut of the money made from audio streaming.
John Whittingdale, a former Culture Secretary, recognised that recording contracts have evolved with a move away from life-of-copyright deals, as well as improved royalty rates averaging 25%.
“However, we know that many creators still have concerns about how they are paid for streaming,” wrote Whittingdale. “While terms in new contracts are increasingly creator-friendly, those benefits are often not extended to creators still signed to older contracts, many of whom are paid at substantially lower royalty rates than their modern counterparts. Additionally, session musicians feel that they are not sharing equitably in the successes of the streaming sector.
“The government wants to see a thriving music industry that delivers sustained growth in an increasingly competitive global music market alongside fair remuneration for existing and future creators. We believe that these aims are complementary, and that reasonable action can be taken by industry to address creators’ concerns around remuneration.”
The government must now make sure the group leads to concrete change so talented creators and performers are properly rewarded for their creativity
Dame Caroline Dinenage
The working group will be composed of representatives and experts from across the music sector, to “explore and develop industry-led actions that support fair remuneration for existing and future music creators as part of a successful and globally competitive music industry”, explained Whittingdale.
The committee’s original report concluded that “metadata issues compound the poor terms on which creators are remunerated”. The committee is awaiting details on the progress on this issue between the government and industry.
Dame Caroline Dinenage, chair of the CMS Committee, said: “The creation of a working group we have been calling for is a welcome step towards addressing the frustrations of musicians and songwriters whose pay falls far short of a fair level given their central role in the success of the music streaming industry. The government must now make sure the group is more than a talking shop and leads to concrete change so the talented creators and performers we have in this country are properly rewarded for their creativity.
“The committee will be keeping a close eye on progress and also looking more widely at artist and creator remuneration to ensure everyone who works in our creative industries can share in its successes.”
The BPI expressed its concerns about the impact on investment in the sector.
Interim CEO Sophie Jones said: “We are concerned the environment being fostered in the UK will disincentivise investment in our creative ecosystem at a time when labels are fighting hard to grow exports and protect the rights of artists in the era of AI. Furthermore, this new effort seems at odds with the government’s ambition to grow the UK's world leading creative industries by an extra £50bn by 2030.
"Over the past three years our sector has been subjected to multiple inquiries and investigations, culminating in a CMA market study that found competition is working effectively and delivering good and improving outcomes for consumers and creators across the sector. Throughout that process the BPI and its members engaged positively and constructively, resulting in a raft of initiatives to improve transparency and the flow of royalty payments to artists. Numerous studies have demonstrated that streaming has benefited consumers and artists alike, with record labels paying more to artists than ever before.”