UK MPs say “streaming needs a complete reset” and cracks down on major labels

A committee is calling for a 50/50 split on royalties between artists and labels

Following a six-month enquiry, MPs are calling for a “complete reset” of streaming, with a fairer cut of royalties given to artists. The UK parliament’s Digital, Culture, Media and Sport (DCMS) published a report of the enquiry, in which they say royalties should be split 50/50 between artists and labels.

The committee took evidence from the likes of Nile Rodgers, who called out major labels last year, and Radiohead’s Ed O’Brien. It recommended solutions such as broadcast-style equitable remuneration (ER); legislation giving artists a “right to recapture” their music after 20 years; an investigation by the CMA into major label’s marketing power and business practices; and calling for songwriters and publishers to get a bigger share of streaming royalties.

MP Julian Knight said that “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.”

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According to the BBC, UK record labels are raking in £736.5 million from streaming services, with artists receiving 16 per cent of revenue share. Spotify is reportedly paying rights-holders a figure between £0.002 and £0.0038 per stream, Apple Music pays around £0.0059, and YouTube is paying a staggeringly low £0.00052 per stream.

As a result, the committee has called upon the CMA to “examine YouTube’s dominance of the music streaming market” and “normalise licencing arrangements”.

During the inquiry, Sony, Universal and Warner Music – the three major labels – faced “some of the toughest questioning of the inquiry, and were accused of a ‘lack of clarity’ by MPs”, reports the BBC. One record label head was also described as “living in cloud cuckoo land”, after stating that artists are happy with the current streaming model. According to the report, the three major labels hold a share of the UK recording market that is equivalent to 75 per cent.

The government’s inquiry was prompted by the #BrokenRecord campaign led by musician Tom Gray. He tweeted that “The [DCMS] report is DAMNING. It brilliantly takes each issue in turn and arrives at a conclusion on the balance of evidence.”

Meanwhile, Geoff Taylor, chief executive of the BPI (British Phonographic Industry), said that “The UK’s global success in music is driven by a label investment in new artists”, and that “streaming is enabling more artists than ever, from all genres, to earn a long-term income”.

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Although this may be a positive step towards fairer pay to artists, it may be some time before any of the DCMS’ recommendations are put into action. And that’s only if the UK government deems them fit for purpose. The inquiry has highlighted some significant flaws in the current system, at least, and could be used in a parliamentary bill. It’s not quite a victory for musicians yet, but the Featured Artists Coalition and Music Managers Forum said the report could “fundamentally improve” the economic situation for thousands of musicians.

The DCMS has published its findings in both a long-form report and as an interactive summary, which you can read here.

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