APPJAG is submitting evidence to the inquiry to ensure that musicians and composers achieve equitable payment for their music and to ensure a level playing field through regulation will enable ethical business models to become the norm.
- The dominant organisations are the likes of Spotify, Apple Music and Amazon Music. They are effectively a mass market with millions of subscribers.
- The payment system used on the major streaming services is the “pro rata” model. With this system, the total revenues are divided and distributed according to the share of total streams for the given payment period.
- For a jazz musician to earn the average household disposable income (after taxes and benefits) of £30,800 from Spotify for the financial year ending 2020, their music would have to be streamed 10.1 million times.
- Both jazz and classical music are disadvantaged. On a major streaming service a 10 minute long symphony movement or a 7 minute long jazz recording is paid the same amount as a 31-second instrumental hip-hop interlude.
- An analysis of the total of monies accruing to record labels, performers and the collecting societies from the monthly breakdown of a French streaming company; showed the record labels taking the lion’s share of 75.7%.
- Playlists and curators whilst appearing to provide a service to consumers are having an insidious effect on music especially with regard to non featured musicians and bands. The impact of playlists, curators and ‘play listing’ by Spotify has pretty clearly shown that whether by design or not, the big streaming platforms are creating winners and losers while they are driving what some characterize as a “revival” of the music entertainment industry.
- The complexities of streaming royalty calculations and the fact that streaming has resulted in the ‘unbundling’ of albums means that musicians receive a fraction of the revenue once received from physical album sales.
- The underlying malaise is that digital distribution has allowed a scale of mass consumption of music hitherto unknown and in the process lowered people’s expectations of the price they should pay.
- There is a crucial need for UK copyright protection with teeth.
- With copyright protection there needs to be greater transparency amongst record labels, music publishers, streaming platforms and other licensing entities so that creators can effectively use their right to audit music companies they are signed to or who administer royalties for them. Furthermore assignment of rights to a music company should have a maximum term, after which the rights should automatically return to the creator, who could decide to extend or place their rights elsewhere.
- Finally there needs to be a programme that educates all types of music creators regarding their rights and the operations of the music industry.
Currently revenues are paid out under the pro rata system. A change in the way revenues are distributed to a “user-centric payment system” – or UCPS would be far more equitable. Under this model, subscriber revenues are distributed according to what the individual user has spent their time listening to.
Please see for the full report: appjag-submission-to-the-dcms-committee-inquiry-into-the-economics-of-music-streaming-15th-november-2020