Category: Music Streaming

Issues related Music Streaming Services

Spotify’s ESG Fail: Environment

Bu Chris Castle

[This is the first in a series of three short posts examining how Spotify scores as an Environmental, Social and Governance (or “ESG”) investment. “ESG” is a Wall Street acronym often attributed to Larry Fink at Blackrock that designates a company as suitable for socially conscious investing based on its “Environmental, Social and Governance” business practices, that is “ESG”. See the Upright Net Impact data model on Spotify’s sustainability score. As of this writing, the last update of Spotify’s Net Impact score was before the Neil Young scandal and, of course, rocketing energy prices that compound the environmental impact of streaming. These posts first appeared on MusicTechSolutions]

Spotify has an ESG problem, and a closer look may offer insights into a wider problem in the tech industry as a whole. If a decade of destroying artist and songwriter revenues isn’t enough to get your attention, maybe the Neil Young and Joe Rogan imbroglio will. But a minute’s analysis shows you that Spotify was already an ESG fail well before Neil Young’s ultimatum.

Streaming is an Environmental Fail

I first began posting about streaming as an environmental fail years ago in the YouTube and Google world. Like so many other ways that the BIg Tech PR machine glosses over their dependence on cheap energy right through their supply chain from electric cars to cat videos, YouTube did not want to discuss the company as a climate disaster zone. To hear them tell it, YouTube, and indeed the entire Google megalopolis right down to the Google Street View surveillance team was powered by magic elves running on appropriate golden flywheels with suitable work rules. Or other culturally appropriate spin from Google’s ham handed PR teams.

Mission creepy meets the Sound of Music

Greenpeace first wrote about “dirty data” in 2011–the year Spotify launched in the US. Too bad Spotify ignored the warnings.  Harvard Business Review also tells us that 2011 was a demarcation point for environmental issues at Microsoft following that Greenpeace report:

In 2011, Microsoft’s top environmental and sustainability executive, Rob Bernard, asked the company’s risk-assessment team to evaluate the firm’s exposure. It soon concluded that evolving carbon regulations and fluctuating energy costs and availability were significant sources of risk. In response, Microsoft formed a centralized senior energy team to address this newly elevated strategic issue and develop a comprehensive plan to mitigate risk. The team, comprising 14 experts in electricity markets, renewable energy, battery storage, and local generation (or “distributed energy”), was charged by corporate senior leadership with developing and executing the firm’s energy strategy. “Energy has become a C-suite issue,” Bernard says. “The CFO and president are now actively involved in our energy road map.”

If environment is a C-suite issue at Spotify, there’s no real evidence of it in Spotify’s annual report (but then there isn’t at the Mechanical Licensing Collective, either). “Environment” word search reveals that at Spotify, the environment is “economic”, “credit”, and above all “rapidly changing.” Not “dirty”–or “clean” for that matter.

The fact appears to be that Spotify isn’t doing anything special and nobody seems to want to talk about it. But wait, you say–what about the sainted Music Climate Pact? (Increasingly looking like a PR effort worthy of Edward Bernays.) Guess who hasn’t signed up to the MCP? Any streaming service as far as I can tell. There is a “Standard Commitment Letter” that participants are supposed to sign up to but I wasn’t able to read it. Want to guess why?

That’s right. You know who wants to know what you’re up to.

If you haven’t heard much about streaming’s negative effects on the environment, don’t be surprised. It’s not a topic that’s a great conversation starter and very few journalists seem to have any interest in the subject at all. I wonder why.

But if you’re an artist who is concerned about the impact of streaming your music on the environment or an investor trying to see your way through the ESG investment, this should give you a few questions to ask about Spotify’s ESG score. And if that slipped by you, don’t feel bad–Blackrock reportedly holds 3.8 million shares of Spotify that are worth less all the time, so they didn’t catch it either. And Blackrock coined the phrase.

Next: Spotify’s “Social” Fail: Rogan, Royalties and The Uyghurs

by thetrichordist

Frozen Mechanicals Crisis: 2nd Comment of @helienne @davidclowery @theblakemorgan Opposing Conflict of Interest in Frozen Mechanicals–‘Let the future have a vote’

SECOND REOPENING PERIOD COMMENTS OF HELIENNE LINDVALL, DAVID LOWERY AND BLAKE MORGAN 

            Helienne Lindvall, David Lowery and Blake Morgan (collectively, the “Writers”) thank the Judges for the opportunity and respectfully submit the following comments responding to the Copyright Royalty Judges’ notice (“Second Notice”) soliciting comments on additional materials (“Reply”) received by the Judges[1] from the National Music Publishers Association, Nashville Songwriters Association International, Sony Music Entertainment, UMG Recordings, Inc. and Warner Music Group Corp. (collectively, the “Majors”)[2] regarding the so-called [frozen] “Subpart B” statutory rates and terms[3] relating to the making and distribution of physical or digital phonorecords of nondramatic musical works in the docket referenced above (“Proceeding”). 

The Writers previously submitted comments[4] (“Prior Comment”) responding to the Judges’ notice[5] (“First Notice”) soliciting comments on the Major’s proposed purported settlement (the “Proposed Settlement”)[6] of the Subpart B rates.  The Writers along with attorney Gwendolyn Seale[7] attempted to submit additional comments in response to the Majors’ filing but were not able to timely file that response.[8]  The Writers appreciate the Judges’ decision to reopen the comment period in order to afford the public, and those that would be bound by the rates and terms set by the Proposed Settlement,[9] an opportunity to comment on those additional materials filed by the Majors and to further participate in the rulemaking.[10]

I.  SUMMARY
            As a general comment on the record to date in Phonorecords IV, the Writers are mystified by the histrionics that have become associated with this Proceeding both on the record and in the press. A voluntary negotiation is just a deal, often made by people who are paid to always be closing. The Writers believe that Congress intended that voluntary negotiation produce a fair result on a reasonable timetable.  

 While not directly at issue in the reopened comment period, what is clearly the case is that the settlement of the Subpart B rates has unnecessarily become a major gating item for the streaming side of this Proceeding, geese and ganders being what they are.  Despite the extensive voluntary negotiation period for the Subpart B rates by the Majors, the Judges—and, frankly, songwriters around the world–are presented instead with a cornucopia of chaos across the board; the cherry on top is the frozen mechanicals crisis.  However, in this season of hope the Writers are confident that the Judges will lead us all out of this daunting situation.

The Writers are not interested in the personalities, the arm-waving or the finger-pointing.  They are interested in the results, particularly because neither they nor anyone they authorized had input into the negotiation that produced either the Proposed Settlement or the impasse.

There is at least one easy way to fix this and recognize the intrinsic value of songs:  Raise the statutory rate proposal for Subpart B configurations in at least some relation to the streaming rate increase.  A song is no less valuable because of the medium in which it is exploited.[11] 

As the Writers will argue, just like the voluntary agreement on Subpart B that led to this impasse was reached by the Majors, those same parties can go back to the drawing board to reach an appropriate conclusion with a higher Subpart B rate.  

Neither the public nor the songwriters are well served (and frankly neither are the Judges) by thrashing about and waiving arms. This may serve well the people who are paid by the hour but it hasn’t served people who are paid by the song.  At all.  “Victory” without winning may pass for success in Washington, but it does not in the writer room or at a songwriter’s kitchen table.

            The Proposed Settlement is a crystallization of everything that is wrong with the licensing and payment practices that have arisen under the compulsory license regime where no is yes, more is less and the Kool-Aid whispers “Drink Me.”  

While the Writers will focus in this comment on the frozen mechanicals issue that has become emblematic of the current crisis, it must be said that the decade-plus MOU [black box] agreements are a backward looking and inequitable insider arrangement that permits a mindset of sloppiness and a “kick the can down the road” mentality that debilitates the entire music publishing business.[12]  It’s no accident that the Mechanical Licensing Collective—run by largely the same cast of characters under a jaw-dropping Congressional governance mandate—has been sitting on $424,000,000 of other peoples’ money for nine months during a pandemic with no visible compliance with another Congressional mandate of paying songwriters correctly in Title I of the Music Modernization Act.[13]  

            The MLC and the sequence of MOUs are both descended from the same ancestors a generation ago.  Each have essentially the same business model and each are somehow inexplicably viewed as a “win” for the songwriters.  The irony of splicing the genetic code of the ancien régime MOU [black box insider settlements] to the future is not lost on anyone.  If the failure to match money and songs in the MOU process is still a problem after fifteen years as well as the much-trumpeted Title I of the Music Modernization Act, it’s not the horse’s fault.  It’s the rider’s.

            It would be a real pity for the CRB to perpetuate this unfairness by adopting the Proposed Settlement.  With respect, it is bad law, bad policy, and a failure to even try to bend the arc of the moral universe.  Conversely, rejecting the Proposed Settlement would provide the kind of steely oversight tragically lacking in the current regime.  Please let the future have a vote, just once.

            The Writers object to the Proposed Settlement for the following reasons and respectfully suggest constructive alternatives.  The gravamen of our objection is that (1) the Subpart B rates have already been frozen since 2006 and extending the freeze another five years is unjust; (2) no evidence has been publicly produced in the Proceeding that justifies or even explains extending the proposed freeze aside from the connection to the memorandum of understanding in the MOU4 late fee waiver (“MOU”), a document that the Majors only recently disclosed in their Reply; (3) very large numbers of songwriters and copyright owners of various domiciles around the world and national origins are unlikely to even know this Proceeding is happening and there still is no evidence that the unrepresented have appointed any of the participants to act on their behalf or were asked to consent to the purported settlement before the fact even if they were members of these organizations aside from the respective board of directors; (4) physical sales are still a vital part of songwriter revenue (which the Writers documented in the Prior Comment[14]); and (5) there are many just alternatives available to the Judges without applying an unjust settlement to the world’s songwriters who are strangers to the Proposed Settlement and in particular the MOU component (as the MOU will likely require membership in the NMPA to benefit consistent with prior MOUs).

[Read the full-length original filing here.]

[1] 86 FR 58626.

            [2] NMPA, NSAI, Sony Music Entertainment, UMG Recordings, Inc. and Warner Music Group Comments in Further Support of the Settlement of Statutory Royalty Rates and Terms for Subpart B Configurations, Determination of Royalty Rates and Terms for Making and Distributing Phonorecords (Phonorecords IV), Copyright Royalty Board (Aug. 10, 2021).

            [3] 37 C.F.R. §385.11(a).

            [4] Comments of Helienne Lindvall, David Lowery and Blake Morgan, Determination of Rates and Terms for Making and Distributing Phonorecords (Phonorecords IV) (July 26, 2021) available at https://app.crb.gov/document/download/25533.

[5] 86 FR 33601.

            [6] Motion To Adopt Settlement of Statutory Royalty Rates and Terms for Subpart B Configurations, Docket No. 21-CRB-0001-PR (2023-2027).

            [7]  Ms. Seale does not otherwise join in this comment.  We understand she is filing a separate comment regarding the additional materials.

            [8] The Writers’ reply was posted on The Trichordist website available at https://thetrichordist.com/2021/08/16/frozenmechanicals-crisis-unfiled-supplemental-comments-of-helienne-lindvall-davidclowery-theblakemorgan-and-sealeinthedeal/.  Parts of that unfiled comment are included in this comment.

[9] See 17 USC 801(b)(7)(a)(i).

                  [10]  As with the Writers prior submission in response to the First Notice, the Writers focus in this comment almost entirely on the Subpart B rates applicable to physical carriers under 37 C.F.R. §385.11(a).  

            [11] The Judges no doubt will be told many stories about how Subpart B configurations are not meaningful sales compared to streaming so rates deserve to be frozen.  This is a novel copyright argument without a statutory basis.  The theory is also not based on accurate facts as the Writers discuss extensively in the Prior Comment at paragraph 5 and will not repeat here.

            [12] There is a growing backlash to decades of delaying definitive action on song metadata and songwriter payments such as Credits Due campaign of the Ivors Academy and Abba’s Björn Ulvaeus.  See generally Chris Cooke, PPL Backs Björn Ulvaeus’s Credits Due Campaign, Complete Music Update (Oct. 4, 2021) available at https://completemusicupdate.com/article/ppl-backs-bjorn-ulvaeuss-credits-due-campaign/

            [13] See, e.g., H. Rep. 115-651 (115th Cong. 2nd Sess. April 25, 2018) at 5; S. Rep. 115-339 (115th Cong. 2nd Sess. Sept. 17, 2018) at 5 (“The Committee welcomes the creation of a new musical works database that is mandated by the legislation….Music metadata has more often been seen as a competitive advantage for the party that controls the database, rather than as a resource for building an industry on.” (emphasis added)).

            [14] See Prior Comment at 16.

by Trichordist Editor

Frozen Mechanicals Crisis: Monica Corton Tells Copyright Royalty Board that Without Parity, the Music Ecosystem Will Fail

Honorable Judges:

My name is Monica Corton, and I am the CEO and Founder of Go to ElevenEntertainment, a newly formed independent music publishing company that is funded. I have been in the music publishing business for over thirty years, twenty- seven of which were spent as the Senior Executive Vice President of Creative Affairs & Licensing at Next Decade Entertainment. My experience is in all areas of music licensing, registrations, and royalty payments, and my former clients included the catalogs of the band Boston, Harry Belafonte, Vic Mizzy (the “Addams Family Theme” and “Green Acres Theme”), Sammy Hagar, and many more.

It is my understanding that the CRB judges are being asked to accept a Motion to Adopt a freeze or a non-rate increase for all mechanical licensing uses for physical phonorecords, i.e., CDs and vinyl, permanent digital downloads, ringtones and music bundles (whenmultiple songs are downloaded in groups) for the Rate Period of 2023 to 2027. The rates for these types of uses have been frozen and have not increased for any music publisher or songwriter since 2006. In the past, the National Music Publishers Association (“NMPA”) has explained these freezes as a necessary component to their negotiation for an increase in the digital streaming rates for mechanical licenses. For many years (2006-2021), I have gone along with this explanation, but after fifteen (“15”) years of having noincrease on any physical product or digital downloads, I now believe it is completely unfair and no longer justifiable for music publishers and songwriters, particularly the

independents and DIY creators (do-it-yourself), to have been denied an increase in these rates after fifteen (15) years of allowing record labels to get away without paying any increase whatsoever, and now face being blocked from a raise for another five (“5”) years.

I originally wrote comments to you on July 26, 2021, and I have included thosecomments below. As there was an extension provided, I felt I should augment my former submission to you with a practical reason for why I believe that physical and digital download mechanical royalty rates should increase, at least by a cost of living, forsongwriters and publishers for the Rate Period 2023-2027.

The one format in physical product that seems to be surging now is vinyl. If one visitsthe Amazon.com shop, new releases of vinyl are selling anywhere from

$24.98 to $49.99 at retail. Generally, the wholesale selling price for a label is half of the retail selling price. Therefore, in this scenario, the labels are making anywhere from $12.49 to $24.99 per unit. Under the current physical mechanical rate which would stay the same if you decide not to increase the royalty rate for physical copies and digital downloads, a publisher would be paid $.91 per record with a ten (10) song cap (standard practice) for the right to use all the songs on that release. However, most singer/songwriters have what is called a controlled composition clause in their recording agreement which requires that they agree to a reduced rate of 75% of the statutory rate with a cap of ten (10) songs. This means that the real rate for most singer/songwriters onan album is $.6825 for all the songs on any given album.

Therefore, the label is making anywhere from $11.8075 to $24.3075 of which a small portion will be paid to the artist for artist royalties and some portion will be paid for the expense of making the record and distributing it. The songwriter and the publisher will thereafter, divide the $.6825 in half so that the songwriter will eventually receive $.3412 for the ENTIRE ALBUM of songs, often recording and releasing more than ten songs because creatives tend to release 12-14 songs on any given album which further reducesthe mechanical rate per song.

I ask you, does it seem fare to you that the record label should make $11.875 to

$24.3075 per record and the singer/songwriter who wrote EVERY SONG ON THE ALBUM will make $.3412?

Songwriters rarely get a say in any of these hearings. Digital rates have devastated whole swaths of our creative songwriter community. Please consider that after fifteen (15) years,it’s time to increase the physical mechanical rate and the digital

download rate for songwriters and publishers. We must create some kind of parity for songwriters in the sale of physical product and digital downloads, or our musicecosystem will begin to fail.

Best wishes, 

Monica Corton CEO & Founder

Go to Eleven Entertainment

[Read the original comment here]

by thetrichordist

Frozen Mechanicals Crisis: Independent Publisher Lynn Robin Green Tells Copyright Royalty Judges how they threaten Survival

President Lynn Robin Green
LANSDOWNE MUSIC-WINSTON MUSIC PUBLISHERS
BLOOR MUSIC-HOFFMAN HOUSE MUSIC

PO BOX 1415 BURBANK, CA 91507

I have been a Music Publisher 45 years and the FREEZING of the statutory mechanical rate which hasn’t been raised in many many years CAUSES us undue continual financial hardship.

The low streaming rates have decimated our earnings for my Writers and Administrated Publisher Clients for the last six years and have have forced us into a corner financially to try to make up for this deep loss of revenue. I administrate also 39 Publishing firms here and these streaming losses are continual.

The Mechanical sales and Sync licensing fees are our only solid source of revenue to try to compensate for these deep losses. Its imperative that THE MECHANICAL RATES BE unfrozen asap and REMADE for REALISTIC FACTUAL inflation considerations of 2021 and for a willing seller/buyer in todays actual market.

We can’t survive if this RATE of 9.1 cts IS NOT raised and adjusted FAIRLY by the CRB for these very urgently important considerations. The Parties who are trying to freeze the rates here are highly conflicted and their sole interests are purely as Parties to Technology deals- and are self projected- and they SIMPLY violate any FAIRNESS OF MECH RATES FOR ALL PUBLISHERS AND SONGWRITERS concerned.

Please listen, please consider the Creators and the Independent Music Publishers who would suffer undue catastrophe level FURTHER financial loss if that RATE is DEEMED frozen for any more additional years whatsoever. WE absolutely URGENTLY need this rate increase NOW, its beyond crucial to our way of business and I implore the CRB to listen to the Independents and Creators and KNOW the truth and hard reality of what THIS important decision represents for our future. 

WE MUST RAISE the mechanical rates, and help save this business of publishing from being plundered for large Corporate interests, WITHOUT FAIR or competitive compensation for small independent businesses.

Sincerely 

LR Green

[Read original comment as filed]

by Trichordist Editor

Press Release: House of Commons, Digital Culture Media and Sport Committee: New Report: Economics of music streaming

MPs call for a ‘complete reset’ of music streaming to fairly reward performers and creators 

Successful artists see ‘pitiful returns’ from streaming while some performers are frozen out of payments altogether 

Artists must be given a legal right to a fairer share of revenues from streaming, the DCMS Committee concludes, following a wide-ranging inquiry that calls for a complete reset of the market. 

The Report into the Economics of music streaming finds that comprehensive reform of legislation and further regulation is needed, not only to redress the balance for songwriters, performers and composers, but to tackle fundamental problems within the recorded music industry. 

Services that host user-generated content gain significant advantage on copyright say MPs, with YouTube emerging as a dominant player. The Report warns of ‘deep concerns’ about the unassailable position of the major music companies with a call for the Competition and Markets Authority to examine whether competition in the recorded music market is being distorted. 

Though consumers enjoy music that is historically cheap, more personalised and more readily available than ever before, streaming’s short-term pricing structure puts music at risk in the long-term, say MPs. 

Chair of the DCMS Committee Julian Knight MP said: 

“While streaming has brought significant profits to the recorded music industry, the talent behind it – performers, songwriters and composers – are losing out. 

“Only a complete reset of streaming that enshrines in law their rights to a fair share of the earnings will do. 

“However, the issues we’ve examined reflect much deeper and more fundamental problems within the structuring of the recorded music industry itself. 

“We have real concerns about the way the market is operating, with platforms like YouTube able to gain an unfair advantage over competitors and the independent music sector struggling to compete against the dominance of the major labels. 

“We’ve heard of witnesses being afraid to speak out in case they lose favour with record labels or streaming services. It’s time for the Government to order an investigation by the Competition and Markets Authority on the distortions and disparities we’ve uncovered.” 

ENDS 

Key findings and recommendations: 

• Government to legislate so that performers enjoy the right to equitable remuneration for streaming income 

• Government to refer case to the Competition and Markets Authority to undertake full market study into the economic impact of the major music groups’ dominance 

• Government should introduce robust and legally enforceable obligations to normalise licensing arrangements for UGC-hosting services, to address the market distortions and the music streaming ‘value gap’ 

A full list of conclusions and recommendations can be found in the attached report 

‘Pitiful returns’ from streaming 

Performers, songwriters and composers receive only a small portion of streaming revenue due to poor royalty rates and because of the lower valuation of song-writing and composition, compared to the value of a song’s recording. Evidence from artists and songwriters who enjoy critical success described earnings from streaming as insufficient to ‘keep the wolf from the door’ or to live off, a position magnified by the loss of income from live performances. Such ‘pitiful returns’ from music streaming are found to impact the entire creative ecosystem with session musicians frozen out altogether. 

The Report notes that several performers who gave evidence claimed that they and many of their peers were afraid of speaking out against the status quo for fear of losing favour with major record labels and streaming services. 

Equitable remuneration 

MPs call on the Government to introduce a right to equitable digital music remuneration. Though performers have a right to equitable remuneration where a commercially published sound recording is rented (broadcast via the radio, or played in public), streaming exploits the ‘making available’ right for recordings under UK copyright law. The Report says the right to equitable remuneration should be applied to the ‘making available’ right, drawing on the precedent of how the right to equitable remuneration applies to rental, as a simple yet effective solution to the problems caused by poor remuneration as it is a right already established within UK law, and applied to streaming elsewhere in the world. It also argues that this would address the inconsistency whereby equitable remuneration already applies to songwriters and composers. The Government should also consider how to increase the value of a song to give parity with a recording to support songwriters and composers. 

Case for CMA to examine Universal, Sony and Warner ‘market dominance’ 

The Report finds a case for a full study by the CMA into the economic impact of the dominance by major music companies Universal, Sony and Warner of the UK’s music recording industry, and to a lesser extent in publishing. Further, the Government must make sure that UK law is not enabling market dominance. It should support independent labels to challenge the majors’ dominance, with creators empowered to offset the disparity in negotiating power when signing with music companies. 

Further evidence to support a referral to the CMA comes from ongoing concerns about the majors’ position in direct licensing negotiations with streaming services which allows them to benefit at the expense of independent labels and self-releasing artists, particularly regarding playlisting. 

MPs question whether with the major record labels’ market dominance on song rights, a song would be fairly valued and urge consideration by the CMA of the majors’ dominance in recording and publishing on this point. 

‘Safe harbour’ 

‘Safe harbour’ gives services that host user-generated content (UGC) such as YouTube a competitive advantage over other services, exempting them from legal liability for copyright infringement unless and until they obtain “actual knowledge” of infringing activity, in which case they must remove or to disable access to it. The Report finds these exemptions, now transposed into UK law, have had a profound impact on the market, with UCG-hosting services gaining broad limitations of liability that undermine the music industry’s leverage in licensing negotiations. It recommends the CMA examine YouTube’s dominance of the music streaming market and take steps to encourage competition. To prevent market distortion, the Government should introduce obligations enforceable in law that would ‘normalise’ licensing arrangements for UCG-hosting services. 

Legacy contracts and recoupment 

To address a wider imbalance, the Report recommends a right to recapture the rights to works after a period of time from record labels, and a right to contract adjustment if an artist’s work was successful beyond the remuneration they received. 

Performers, signed to a record deal, are paid according to the terms of their contract with their record label from streaming revenue after production costs are recouped. Many labels do not write off debts meaning that deals signed decades ago can still recoup against initial production and distribution costs. Following an appearance before the Committee, Sony announced it would “pay through on existing unrecouped balances to increase the ability of those who qualify to receive more money from uses of their music” for deals before 2000. MPs call for Universal and Warner to look again at the issue of unrecouped balances with a view to enabling more of their legacy artists to receive payments when their music is streamed. 

User-centric model 

MPs heard evidence of different models to distribute streaming revenues, either the predominant pro-rata payment model or alternatives such as user-centric. They welcome the consideration by new services of ways to address fairness and transparency in remuneration. However, are concerned that current contractual agreements between the major music companies and streaming services could stifle further innovation if misused and recommend consideration by the CMA. 

The Report also make recommendations on licensing and royalty chains to increase transparency to creators. 

Further information: 

The inquiry into the Economics of music streaming was launched in October 2020. It received more than 300 pieces of written evidence. Among artists and performers who gave evidence, songwriter and producer Nile Rodgers, Radiohead’s Ed O’Brien, Elbow’s Guy Garvey and soloist Nadine Shah. It took evidence from the UK’s independent music sector, as well as major record labels Sony Music, Warner Music and Universal Music. Spotify, Amazon, Apple and YouTube also gave evidence. 

Committee membership: 

Julian Knight MP (Chair) (Conservative, Solihull); Kevin Brennan MP (Labour, Cardiff West); Steve Brine MP (Conservative, Winchester); Alex Davies-Jones MP (Labour, Pontypridd); Clive Efford MP (Labour, Eltham); Julie Elliott MP (Labour, Sunderland Central); Rt Hon Damian Green MP (Conservative, Ashford); Rt Hon Damian Hinds MP (Conservative, East Hampshire); John Nicolson MP (Scottish National Party, Ochil and South Perthshire); Giles Watling MP (Conservative, Clacton); Heather Wheeler (Conservative, South Derbyshire). 

Media queries to Anne Peacock peacocka@parliament.uk / 07753 101 017; Gina Degtyareva degtyarevae@parliament.uk / 07548 146 012. 

Visit the DCMS Committee website 

Committee Twitter: @CommonsDCMS 

Specific Committee Information: cmscom@parliament.uk / 020 7219 6188 

Data protection: The personal information you supply will be processed in accordance with the provisions of the General Data Protection Regulation and the Data Protection Act 2018. Full details of how your data will be used can be found here. You may unsubscribe from this mailing list at any time. 

by Trichordist Editor

International Federation of Musicians Statement on Streaming Royalties (Or lack thereof)

Since the 2000s, the development of download platforms, then streaming services, has both contracted and expanded the music market. However, despite recently accelerating growth, the value thus created is not shared fairly. Indeed, the performers whose music creates this value receive little or no revenue when their recordings are used online with relatively few exceptions.

The implementation of the fundamental principles set out below is essential to, at last, guarantee the payment of a fair remuneration to music performers for the value transfer from their work. Such implementation must, in particular, rely on the proven mechanisms of collective management or collective bargaining.

1. Right to a fair remuneration

All music performers, whether featured or non-featured, should receive fair remuneration for each online use of their recordings, regardless of the technology used to access or distribute them.

Any act that does not meet the conditions for a download (choice of track + choice of time + choice of location) should not be covered by the right of Article 10

2. Scope of the right of making available on demand

The right of making available on-demand (article 10 of the WIPO Performances and Phonograms Treaty) provides performers with “the exclusive right of authorizing the making available to the public of their performances fixed in phonograms, by wire or wireless means, in such a way that members of the public may access them from a place and at a time individually chosen by them”.

This right was formulated at the time of the transition from physical to digital distribution by download. The technological evolution that has allowed the development of streaming offers since 2008 was in no way anticipated when the WPPT was adopted in 1996. Article 10 could never have been the subject of a consensus if the community of performers had measured the risk of its erroneous application to all the uses offered by streaming platforms.

The right of making available on-demand is designed for cases where end-users choose what music they want to listen to, when to listen to it and where to listen to it. Thus, any act that does not meet the conditions for a download (choice of track + choice of time + choice of location) should not be covered by the right of Article 10.

In particular, it should not apply when a selection of tracks made by a third party (a natural person or an algorithm) is offered for listening to the consumer, following a personalization based on the choice of a style, an atmosphere, an artist or any other criterion leading to a limited and pre-established “playlist”.

3. Adaptation of remuneration schemes

Performers’ economic precariousness – highlighted during the COVID-19 pandemic – demonstrates that the exclusive right of making available on-demand (art. 10 of the WPPT), which can be assigned individually without any real compensation, is in itself unfit for embracing the current technological environment. The unilateral choice of platforms and the phonographic industry to apply this right to all forms of streaming, regardless of their level of interactivity or personalization, obviously serves the interests of these industries.

Non-featured performers generally receive a one-time, often purely symbolic, lump-sum payment in return for the transfer of their exclusive rights to the producer. Such unfair practices deprives them of a fair share of the revenue and value generated by their creative contribution. This structurally unbalanced contractual relationship can be corrected by resorting to collective bargaining.

More generally, collective bargaining constitutes a legitimate and effective means of improving the conditions for the transfer of a performer’s exclusive rights and their remuneration once assigned to the producer.

As grassroots protests by performers illustrate, the status quo is untenable. The streaming economy must switch paradigms to ensure fair remuneration for all performers and all types of online uses. Concerning non-interactive or partially interactive uses (playlists), the right to remuneration under Article 15, WPPT, which leads to an equal split of the equitable remuneration received from broadcasters and other users, constitutes a relevant reference model and precedent.

4. Transparency and access to information

All performers must receive and be able to access detailed information concerning the use of their recordings and the payments to which they are entitled. Payment of sums due to the artist must occur on the dates specified, must be subject to a compliance examination of platforms by performers to help assure correct payments, and must be accounted for regardless of the amount and without payment thresholds. National laws must include provisions guaranteeing the exercise of these rights.

5. Value of Music

Price competition between platforms and the priority they give to enterprise market valuation (as reflected in share price) over revenue may induce a devaluation of music in a race to the bottom on royalty payments while share price is booming. Access to a repertoire through output licenses set to grow endlessly for a flat-rate subscription – which has remained at the essentially same price point for more than ten years – does not seem capable of providing long-term sustainability for the creative sector given the dominant pro-rata royalty model.

6. User-centric model

In the vast number of cases, the pro-rata distribution of streaming revenues does not remunerate the featured artists’ right of making available, even when their contract provides (after the transfer of this right) for the payment of royalties. Instead, it creates a hyper-efficient market share distribution of revenue. This is not acceptable. It is also not acceptable for end-users to pay for music that they do not listen to, or that the music they listen to does not generate commensurate income for the artists concerned. This lack of direct correlation between listening and payment is a fundamental problem. Only the universal adoption of the “user-centric” distribution model can redress this injustice to both the fan and the performers. By allowing “niche” recordings, works or styles to generate remuneration, it also supports diversity and promotes local cultures. It should therefore be implemented, and the economic models adapted accordingly.

7. Duration of reference for the count of plays

The length of the tracks varies considerably according to the genre of music. Durations can range from less than two minutes for a variety track to several tens of minutes for a jazz or classical music track. The count of plays entitled to payment should take these differences into account by introducing a dose of proportionality. A longer track should trigger several payments as listening reaches certain thresholds to be negotiated.

By limiting the economic return on very short tracks, such an adaptation would avoid an excessively uniform offer. It would also positively affect diversity by partly redirecting payments towards less popular musical genres such as jazz or classical music. More generally, artistic creativity could be expressed more freely, without time constraints motivated by profitability objectives.

by Trichordist Editor

The Rolling Stones and Sir Tom Jones call on UK Prime Minister Boris Johnson to fix streaming income for musicians and to put the value of music back “in the hands of music makers”

The Rolling Stones, Pet Shop Boys, Emeli Sandé, Barry Gibb, Van Morrison, Sir Tom Jones and the Estates of John Lennon and Joe Strummer have written to the Prime Minister “on behalf of today’s generation of artists, musicians and songwriters here in the UK”. 

All the modern British recording artists named by Boris Johnson in his Desert Island Discs are now represented on the letter. 

In an unprecedented show of solidarity, they have added their names to a joint letter with artists such as Annie Lennox, Paloma Faith, Kano, Joan Armatrading, Chris Martin, Gary Barlow, Paul McCartney, Melanie C, Jimmy Page, Boy George, Noel Gallagher and Kate Bush, calling on the PM to update UK law to “put the value of music back where it belongs – in the hands of music makers.”

This renewed call comes on the back of a report last week by The World Intellectual Property Organisation (WIPO) which said this is a “systemic problem [that] cries out for a systemic solution” and concluded that streaming should start to pay more like radio: “The more global revenues surge, the harder it is for performers to understand why the imbalance is fair—because it is not…streaming remuneration likely should be considered for a communication to the public right.”

More and more people are streaming music – heightened by the pandemic – but, as the artists point out, “the law has not kept up with the pace of technological change and, as a result, performers and songwriters do not enjoy the same protections as they do in radio,” with most featured artists receiving tiny fractions of a US cent per stream” and session musicians receiving nothing at all.  

The letter suggests that “only two words need to change in the 1988 Copyright, Designs and Patents Act…so that today’s performers receive a share of revenues, just like they enjoy in radio” – a change which “won’t cost the taxpayer a penny but will put more money in the pockets of UK taxpayers and raise revenues for public services like the NHS” and which will contribute to the “levelling-up agenda as we kickstart the post-Covid economic recovery.”

The 234 signatories do not want streaming to be recognised as radio. Instead, they want streaming to share some of radio’s remuneration model so that they are paid more fairly. Legislation, despite recognising that streaming is replacing sales, is yet to recognise that the technology is on its way to replacing radio too. 

The letter is backed by the Musicians’ Union, the Ivors Academy and the Music Producer’s Guild collectively representing tens of thousands of UK performers, composers and songwriters and producers, brought together in partnership with the #BrokenRecord campaign led by artist and songwriter, Tom Gray.

The Commons DCMS Committee has been examining this issue with its Economics of music streaming inquiry, expected to report by the end of this month, but it is understood that this issue falls between the remits of both the DCMS and BEIS departments, which is why the artists have chosen to address it to the Prime Minister.  

The letter also recommends “an immediate government referral to the Competition and Markets Authority” because of “evidence of multinational corporations wielding extraordinary power” over the marketplace and the creation of an industry regulator. 

They write that these changes “will make the UK the best place in the world to be a musician or a songwriter, allow recording studios and the UK session scene to thrive once again, strengthen our world leading cultural sector, allow the market for recorded music to flourish for listeners and creators, and unearth a new generation of talent.”

Tom Gray, Founder of the #BrokenRecord Campaign, said:

“It is amazing and timely that the World Intellectual Property Organisation, who create the global treaties that underpin UK law, are now reporting that we are right. This is the moment for the UK to lead the way. British music makers are suffering needlessly. There is an extraordinary amount of money in music streaming. It is a success story for a few foreign multinationals, but rarely for the British citizens who make the music”

“This letter is fundamentally about preserving a professional class of music-maker into the future. Most musicians don’t expect to be rich and famous or even be particularly comfortable, they just want to earn a crust.”

Horace Trubridge, General Secretary of the Musicians’ Union, said:

“I’m delighted to see so many artists, performers and songwriters backing our call.  Streaming is replacing radio so musicians should get the same protection when their work is played on streaming platforms as they get when it’s played on radio.

“As the whole world has moved online during the pandemic, musicians who write, record and perform for a living have been let down by a law that simply hasn’t kept up with the pace of technological change.  Listeners would be horrified to learn how little artists and musicians earn from streaming when they pay their subscriptions.

“By tightening up the law so that streaming pays more like radio, we will put streaming income back where it belongs – in the hands of artists.  It’s their music so the income generated from it should go into their hands.”

Graham Davies, Chief Executive of the Ivors Academy, said:

“Paying music creators properly, which is what so many incredible artists have spoken up to ask for on behalf of present and future musicians and songwriters, will drive the streaming industry and sustain the UK creative economy. Music should and could be a major national asset, but its potential value is currently stripped by overseas interests.

We need to keep the value of British music in our nation by supporting, nurturing and investing in our creators, whilst ensuring the handful of foreign multinational corporations which dominate the music industry and have little interest in preserving British cultural heritage, contribute more value back into the UK. These easy steps will achieve exactly that.”

Crispin Hunt, Chair of the Ivors Academy, said:

“Major Music labels delude themselves that they are the sole providers of the music economy. They are not; the musicians, producers and composers who signed this letter are the true providers of the music economy; without them, no employment in music could exist.

“Britains Music Creators should be the primary beneficiaries of the value their creativity drives.  The record companies are now glorified marketing firms, without manufacturing and distribution costs. Their extraordinary profits ought to be shared more equitably with creators. In streaming the song is king, yet songwriters are streaming’s serfs.

“British Music Creators want nothing more than a reasonable partnership with the companies that market and distribute our work. But a reasonable partnership should be based on shared rewards and responsibilities, not unilateral takings.

“With this letter, Britain’s greatest Music Creators say Music must reform, Government can and should help us fix it.”

by Trichordist Editor

Press Release: Nordic Musicians Union Condemns Copyright Buyouts

[Editor T says “Looking at you, Epidemic Sound!”]

At its meeting on the 21st of April 2021, the Nordic Musicians Union, NMU, discussed the issue of copyright buyouts.


Technological development has been rapid in connection with digitalisation and globalization. This has challenged existing remuneration models that have been developed over a long period of time. This includes legislation, agreements, and collective management organisations. This rapid development has affected the income of performers in a very negative way.

We note that the compensation levels generated via digital uses are unreasonably low. Therefore, the NMU, at both national and international levels, have introduced the need for stricter legislation regarding the balance of power in negotiations. This includes mandatory rules that ensure a reasonable remuneration for digital uses. The European Commission has acknowledged this need in the 2019 Copyright Directive by introducing provisions on appropriate and proportionate remuneration to authors and performers and further provisions to improve the bargaining position of performers. The Directive shall be implemented no later than 7 June 7, 2021.


The NMU recognise that business models are emerging that work around the legislation by maximizing the use of musicians’ and artists’ performances whilst ignoring long-standing practices and established copyright systems. Instead, they pay one-time compensation, undermine the moral rights, and might even demand that musicians and artists leave their own collection management organisations.


NMU’s view is that musicians should be paid fairly and correctly, both for their labour and for their copyright based on the actual exploitation over time. The moral rights must be fully respected and the choice to be a member of one’s own collective management organisation must be defended.


Performing artists receive far too little of the value that music generates when it is used. During the Corona pandemic, it has become all too clear that musicians need the backing and support of legislators as well as the audience and the music industry.


The NMU strongly opposes wholesale of rights for any possible use, known or yet to be discovered, against a one-off payment. Complete buyouts are not the future business model for performers!

Signed:


the Swedish Musicians Union

the Swedish Union of Professional Musicians, SYMF

the Finnish Musicians Union

the Danish Musicians Union, DMF

the Union of arts and culture of Norway, Creo

the Icelandic Musicians’ Union, FIH

by Trichordist Editor

Open Letter: Dozens of Artists, Musicians and Songwriters Seek Referral to UK Regulators to Oversee Streaming Royalties

[A bit of context: With all the riches being made from streaming, session musicians and vocalists make zero. And don’t forget that music made Daniel Ek a billionaire.]

Broken Record Campaign

Ivors Academy

Musicians Union

April 20, 2021

The Rt Hon Boris Johnson MP
Prime Minister
10 Downing Street
W1A 2AA

Dear Prime Minister,

We write to you on behalf of today’s generation of artists, musicians and songwriters here in the UK.

For too long, streaming platforms, record labels and other internet giants have exploited performers and creators without rewarding them fairly.  We must put the value of music back where it belongs – in the hands of music makers.

Streaming is quickly replacing radio as our main means of music communication. However, the law has not kept up with the pace of technological change and, as a result, performers and songwriters do not enjoy the same protections as they do in radio.

Today’s musicians receive very little income from their performances – most featured artists receive tiny fractions of a US cent per stream and session musicians receive nothing at all.

To remedy this, only two words need to change in the 1988 Copyright, Designs and Patents Act. This will modernise the law so that today’s performers receive a share of revenues, just like they enjoy in radio. It won’t cost the taxpayer a penny but will put more money in the pockets of UK taxpayers and raise revenues for public services like the NHS.

There is evidence of multinational corporations wielding extraordinary power and songwriters struggling as a result. An immediate government referral to the Competition and Markets Authority is the first step to address this. Songwriters earn 50% of radio revenues, but only 15% in streaming. We believe that in a truly free market the song will achieve greater value.

Ultimately though, we need a regulator to ensure the lawful and fair treatment of music makers. The UK has a proud history of protecting its producers, entrepreneurs and inventors. We believe British creators deserve the same protections as other industries whose work is devalued when exploited as a loss-leader.

By addressing these problems, we will make the UK the best place in the world to be a musician or a songwriter, allow recording studios and the UK session scene to thrive once again, strengthen our world leading cultural sector, allow the market for recorded music to flourish for listeners and creators, and unearth a new generation of talent.

We urge you to take these forward and ensure the music industry is part of your levelling-up agenda as we kickstart the post-Covid economic recovery.

Yours Sincerely,

Damon Albarn OBE

Lily Allen

Wolf Alice

Marc Almond OBE

Joan Armatrading CBE

David Arnold

Massive Attack

Jazzie B OBE

Adam Bainbridge (Kindness)

Emily Barker

Gary Barlow OBE

Geoff Barrow

Django Bates

Brian Bennett OBE

Fiona Bevan

Aflie Boe OBE

Billy Bragg

The Chemical Brothers

Kate Bush CBE

Melanie C

Eliza Carthy MBE

Martin Carthy MBE

Celeste

Guy Chambers

Mike Batt LVO

Don Black OBE 

Badly Drawn Boy

Chrissy Boy

Tim Burgess

Mairéad Carlin

Laura-Mary Carter

Nicky Chinn

Dame Sarah Connolly DBE

Phil Coulter 

Roger Daltrey CBE

Catherine Anne Davies (The Anchoress)

Ian Devaney

Chris Difford

Al Doyle

Anne Dudley

Brian Eno

Self Esteem

James Fagan

Paloma Faith

Marianne Faithfull

George Fenton

Rebecca Ferguson

Robert Fripp

Shy FX

Gabrielle

Peter Gabriel

Noel Gallagher

Guy Garvey

Bob Geldof KBE

Boy George

David Gilmour CBE

Nigel Godrich

Howard Goodall CBE

Jimi Goodwin

Graham Gouldman 

Tom Gray

Roger Greenaway OBE

Will Gregory

Ed Harcourt

Tony Hatch OBE

Richard Hawley

Justin Hayward

Fran Healy

Orlando Higginbottom

Jools Holland OBE, DL

Mick Hucknall

Crispin Hunt

Shabaka Hutchings

Eric Idle

John Paul Jones

Julian Joseph OBE

Kano

Linton Kwesi Johnson

Gary Kemp

Nancy Kerr

Richard Kerr

Soweto Kinch

Beverley Knight MBE

Mark Knopfler OBE

Annie Lennox OBE

Shaznay Lewis

Gary Lightbody OBE

Tasmin Little OBE

Calum MacColl

Roots Manuva

Laura Marling

Johnny Marr

Chris Martin

Claire Martin OBE

Cerys Matthews MBE

Sir Paul McCartney CH MBE

Horse McDonald

Thurston Moore

Gary “Mani” Mounfield

Mitch Murray CBE 

Field Music

Frank Musker 

Laura Mvula

Kate Nash

Stevie Nicks

Orbital

Roland Orzabal

Gary Osborne 

Jimmy Page OBE

Hannah Peel

Daniel Pemberton

Yannis Philippakis

Anna Phoebe

Phil Pickett 

Robert Plant CBE

Karine Polwart

Emily Portman

Chris Rea

Eddi Reader MBE

Sir Tim Rice 

Orphy Robinson MBE

Matthew Rose

Nitin Sawhney CBE

Anil Sebastian

Peggy Seeger

Nadine Shah

Feargal Sharkey OBE

Shura

Labi Siffre

Martin Simpson

Skin

Mike Skinner

Curt Smith

Fraser T Smith

Robert Smith

Sharleen Spiteri

Lisa Stansfield

Sting CBE

Suggs

Tony Swain 

Heidi Talbot

John Taylor

Phil Thornalley 

KT Tunstall

Ruby Turner MBE

Becky Unthank

Norma Waterson MBE

Cleveland Watkiss MBE

Jessie Ware

Bruce Welch OBE

Kitty Whately

Ricky Wilde

Olivia Williams

Daniel “Woody” Woodgate

Midge Ure OBE

Nikki Yeoh

by Trichordist Editor