Update on the Economics of Music Streaming
The FAC as part of the Council Of Music Makers welcomes the announcement from the UK government regarding next steps in the ongoing economics of music streaming work that is being led by the Intellectual Property Office. A music-maker remuneration working group is being convened and the UK music industry has agreed a voluntary code around metadata.
The Council of Music Makers has published a White Paper, outlining the processes around the economics of streaming work, the progress to date and the steps that need to be taken to make streaming fair and equitable for music makers. You can read it here.
David Martin, CEO, Featured Artists Coalition:
“The FAC would like to thank the Intellectual Property Office, the DCMS Select Committee and government ministers for bringing the UK music industry together in order to improve the streaming economy. The signing of the metadata code of practice marks a small, but significant step on the journey towards a complete reset of streaming. We look forward to contributing to the next stage of this work on metadata key performance indicators. We also welcome the news that a creator remuneration group is to be established. Remuneration is the FAC’s main focus, as we seek a more equitable deal for the UK’s artist community. We welcome confirmation from ministers that legislative interventions remain an option if the industry is unable to reach voluntary agreement”.
Below is an overview of all recent updates, you can read a more in depth overview in the white paper here.
THE ECONOMICS OF MUSIC STREAMING PROJECTS
Streaming is now by far the biggest revenue generator for the recorded music business. Music-makers have embraced the many opportunities created by streaming and continue to innovate as the digital market evolves.
However, music-makers do not have direct licensing relationships with the streaming services, and this has created a number of issues that stop the music-maker community from truly benefiting from the streaming boom.
After years of campaigning by music-makers, the inquiry by the Digital, Culture, Media & Sport Select Committee in the UK Parliament in 2021 finally brought all the key stakeholders of the music industry together. MPs on the committee produced an insightful and detailed report, and made a number of recommendations, including copyright law reforms.
In response to that vital inquiry, the UK government instigated a number of important projects seeking music industry-led solutions to some of the biggest issues, while further investigating the committee’s legislative proposals. That included work focused on music-maker remuneration, transparency and metadata.
As part of those projects, the CMM organisations have worked in partnership with representatives from streaming services, record labels, music distributors, music publishers and the industry’s collecting societies to identify and implement practical and meaningful solutions.
It has been a slow process and much more still needs to be done. However, we are now making some steps in the right direction.
METADATA
Bad metadata results in music-makers being denied their moral right to attribution. It also causes delays and blockages in getting songwriters paid when their music is streamed. Better metadata would also result in more efficient and accurate payments for music-makers across the board, including in scenarios beyond streaming.
The crucial importance of good metadata in getting music-makers credited and paid – and the ongoing challenges in ensuring that good metadata is in the system – was the motivation for the CreditsDue.org initiative, which is raising awareness of missing metadata and galvanising international cross-industry support for solutions to this big problem.
Initiated by Graham Davies of the Ivors Academy and Bjorn Ulvaeus of the Music Rights Awareness Foundation – together with DIMA, the voice of streaming services – this initiative has gained support from large numbers of supporters, recognising a broad willingness to address the issue. The metadata working group convened by the UK government sought to build on that work and put in place some practical measures to bring about change.
The metadata code that the industry has signed up to in the UK will see every stakeholder in the music industry – including music-makers and their managers – commit to raise their game. Providing the industry embraces this code as a starting point rather than an end game, we can start to address the data issues, credit music-makers, and ensure every songwriter gets paid.
We look forward to working with the IPO to identify key performance indicators that can monitor the success of this code and provide realistic targets for the wider music community to meet.
MUSIC-MAKER REMUNERATION
Music-maker remuneration is the single biggest issue in streaming. It impacts on artists who are releasing new music; artists whose work fills the music industry’s increasingly valuable catalogues; songwriters and composers; session musicians and studio producers.
The specific issues are often different for each group of music-makers. The copyright law reforms currently on the table – which have been the subject of IPO commissioned research – can address some of these issues. Though there are other solutions to consider as well.
The CMM has repeatedly called for a specific working group to discuss remuneration and are very grateful that ministers have now positively responded to that request.
NEXT STEPS
The CEOs of all three major record companies have recently stated that the way the streaming business works needs to evolve. Universal Music has called for an ‘artist-centric’ approach.
The CMM agrees. And the ongoing economics of music streaming work here in the UK is the perfect forum for identifying how the music industry at large can deliver a transparent, dynamic and equitable streaming music business that benefits all.
A lot of work has already gone into the IPO-led projects, not least from the IPO itself. But much more work needs to be done. Today’s announcements constitute some important steps in the right direction. But they are small steps on a long journey. We encourage everyone in the music industry to join the CMM in committing to continue that journey until we reach our destination.
To help everyone keep track of this long journey, the CMM has identified five fundamental objectives that we believe everyone in the music industry should seek to achieve. We will be tracking each of these objectives each month to assess how close the industry is to achieving that transparent, dynamic and equitable streaming music business.
THE FIVE FUNDAMENTALS
All featured artists should receive a modern, minimum digital royalty rate, with unrecouped balances written off after a term, on a rolling basis, without any additional conditions.
All session musicians should see the benefit of the streaming boom, on both new recordings and catalogue.
All music-makers should have an opportunity to revise outdated old contract terms, making old deals fit for purpose in the modern music business. Remuneration should always be fair and appropriate.
All songwriters and artists must be given transparency on how their music is monetised by each digital platform. That includes proactively communicating how monies are allocated to each music-maker’s songs and recordings, and then shared with and paid through to them.
The whole industry should ensure that all required music rights data is in the system before release. Every music-maker should always be credited for their contribution and digital royalties must reach songwriters as quickly and accurately as they do for artists.
CMM's statement on the select committee letter confirming the remuneration working group.
CMM's statement on the IPO's announcement of the metadata code and the remuneration working group.