Ahead of the final session of the DCMS Committee inquiry into the economics of streaming, Music Managers Forum CEO Annabella Coldrick looks at what to expect when MPs quiz government ministers today and highlights areas that the trade body believes are in need of urgent reform…
Since its opening sessions in October 2020, the DCMS Select Committee inquiry into the economics of streaming has received extensive coverage across the UK media and beyond, with MPs gathering evidence from a wide range of perspectives – from artists and songwriters, through to managers (MMF vice chair, Kwame Kwaten appeared in December 2020), record labels, collecting societies and publishing representatives, as well as platforms such as Spotify, Apple Music, SoundCloud and YouTube.
As is usual with Parliamentary inquiries, today the committee puts questions to the Ministers with the most relevant portfolios, with Culture Minister, Caroline Dineage MP, due to appear at 4pm, alongside Amanda Soloway MP from the Department for Business, as well as officials from DCMS and the Intellectual Property Office.
That discussion could cover a lot of ground, including the pros and cons of equitable remuneration and user-centric licensing, potential reforms to contracts and business practices, and even the cost of streaming subscriptions.
It will be followed by a full report with recommendations from the committee, and then a formal response from the government.
The context for these inquiry sessions have been all-important. In pre-pandemic times, the majority of artists and songwriters relied on a multitude of income streams, of which live performance, for the vast majority, was the most important. For the average MMF member, 80% of theirs (and their artists) business revenue came from live music.
Most agree that streaming has been an overall positive to the business, opening up global markets and returning the recorded sector to health
With Covid effectively cutting off this income source, focus has inevitably switched elsewhere and – with impetus from the #BrokenRecord and Keep Music Alive campaigns – reignited debates around disparities and dysfunctions in the streaming market, and particularly from those artists who feel denied a fair share of streaming revenue.
Via our Dissecting The Dollar initiative these have all been long-running areas of interest for the MMF, in which we’ve explored everything from legacy contracts and the impenetrable lack of transparency with DSP licensing, through to the ongoing inefficiencies in how songwriter streaming royalties are collected and distributed.
Most agree that streaming has been an overall positive to the business, opening up global markets and returning the recorded sector to health – to the point where services like Apple Music, Amazon, Spotify and YouTube are reportedly generating the 3 major labels more than $1m each per hour. It is also clear there are a multitude of ways in which the system itself can be improved and deliver more to our business’ most important constituents: the artists, songwriters, producers and performers who create the music that sustains our entire industry, along with the audience that consumes, supports and pays for it.
Certainly, the committee has allowed a valuable airing for many of these ideas, and it was truly heartening to hear UMG’s David Joseph state that, while streaming is not perfect he has a ton of ideas on how to improve things for artists.
As highlighted by the MMF & FACs submission, there’s a whole host of simple, proactive and pragmatic steps that the industry could be taking to improve how the system works for music makers. These include modernising legacy contracts to ensure they’re fit for purpose by increasing analogue royalty rates to reflect modern digital deals, removing outmoded clauses and writing off unrecouped advances, as well as ensuring the structure and impacts of new licensing deals are transparently communicated to artists, writers and managers.
At the very least, we believe that an artist’s accountant should, on request but subject to an NDA, have sight of specific deal terms where that information is required to properly audit an artist’s royalties and ensure they are paid correctly.
Some of these issues could potentially be addressed through implementation of chapter 3 of the 2019 European Copyright Directive or legislating an improved UK version of this transparency chapter that serves the interests of our music makers.
Then there’s the much-needed overhaul of songwriter royalties, where we desperately need new efficiencies to help unlock the tangle of global royalty chains that reduce payments to writers and composers, as well as wholesale changes to black box collections and distributions. We would like to see genuinely “unattributable royalties” used to fund data, educational and grassroots initiatives, rather than being distributed by market share.
We are where we are due to the inability of the industry to get its own house in order
The MMF believes that no subject should be off the table, and, as Kwame highlighted in his session, constituents from all sides of the business should be around that table. It’s undoubtedly true that new artists have more options in how they license their music and take it to market, but much of the value in streaming has been generated by the catalogue – much of it licensed under arcane terms that are outdated and need revision.
Despite the obvious tensions between reformers and those who favour the status quo, the industry should be incentivised to tackle and address these inequalities and dysfunctions, ideally with oversight from government.
There is precedent in this area, for instance in the Code of Practice negotiated between the Motion Pictures Association and BPI with Google, Bing and Yahoo to prevent pirate sites appearing on search. This successful initiative shows what can be achieved when stakeholders work together, with the government using its convening power to hold industry to account.
What we don’t want to see in the inquiry’s aftermath are uncomfortable conversations dismissed out of hand, or substituted with promises of jam tomorrow, or sidetracked with more discussions about the “value gap” and safe harbours. These latter issues are important, for sure, but they won’t address existing inequalities from transposing an analogue system onto digital, or affect how revenues flow through to artists and other creators.
If some of the industry’s plumbing is unfit for purpose, then it’s pretty essential we fix the leaky pipes!
It’s been a tough year fighting so many battles; whether trying to get the support for our sector to survive Covid or to trying to deal with the disastrous legacy of Brexit.
This is another battle we don’t need at the moment but that we have to face head on. We are where we are due to the inability of the industry to have this conversation ‘behind closed doors’ and get its own house in order. I sincerely hope that today’s committee can provoke a sea change in attitudes and provide a catalyst for some meaningful conversations, but the government has a role to play in ensuring these discussions are held and that changes are made.
Read all Music Week’s coverage of the DCMS Committee streaming inquiry here.