FAC & MMF welcome the DCMS Select Committee Report into the Economics of Music Streaming- MPs call for ‘complete reset’

More than seven months ago the UK Parliament launched an inquiry into the economics of music streaming. The Department for Digital, Culture, Media & Sport (DCMS) Select Committee examined the impact music streaming is having on artists, record labels and the sustainability of the wider music industry.

Many witness sessions took place over the last few months, featuring artists like FAC Board Director Ed O’Brien, Nile Rodgers, FAC Advocate Nadine Shah, Tom Gray, Guy Garvey and many other industry professionals. The inquiry was seeking the perspectives of industry experts, artists and record labels as well as streaming platforms themselves. We also supported members and other artists to submit evidence and we thank everyone who did.

More than seven months after the very first evidence session, the DCMS have published their report. The report covers the following: creator remuneration, the domincance of digital music, music rights market and music streaming market. For all of which the DCMS committee have published a summary of conclusions and recommendations in the report.

The committee of MPs has recommended that government ministers should urgently address “fundamental, structural problems within the recorded music industry” with the involvement of the Competition & Markets Authority in a full market study into the majors’ possible dominance.

From the report: “ Despite the streaming boom that has provided a partial economic recovery for the music industry, not all stakeholders have received proportionate benefit. In many instances, companies have leveraged structural advantages to achieve seemingly unassailable positions in their relative markets. Streaming services that host user-generated content (UGC) have significant advantages over other services due to copyright ‘safe harbours’, which has led to the dominance of services like YouTube. We have been told that the major music companies have experienced historic profit margins, and continue to consolidate their position as the largest asset owners of recording and song rights through mergers, acquisitions, and integration with all aspects of the digital music business.

Meanwhile, performers, songwriters and composers receive only a small portion of revenue due to poor royalty rates and because of the valuation of song writing and composition, relative to the recording. Whilst these issues predate the Covid-19 pandemic, this has been compounded and thrown into sharp relief by the loss of live music, which continues to impact them and the ecosystem that supports them. Poor remuneration risks disincentivising successful, professional musicians and diminishing the UK’s ability to support new domestic talent.

We recommend a broad yet comprehensive range of legislative reforms and regulatory interventions to deal with these issues. In order to address artist remuneration and the disparity in power between creators and companies, we recommend that the Government introduce a right to equitable digital music remuneration, a right to recapture the rights to works after a period of time and the right to contract adjustment if their works are successful beyond the remuneration they receive. We have deep concerns about the position of the major music companies and call on the Government to support the independent sector and take advice from the Competition and Markets Authority as to whether competition in the recorded music market is being distorted. We also advise the Government to proactively normalise the requirements on streaming services both within the streaming market and with other modes of music consumption, by placing greater licensing obligations on UGC-hosting services, future-proofing the public service broadcasting prominence regime and addressing ‘payola’ concerns about algorithms and playlist curators”

Read the full report here.