UK Parliament calls for 50/50 streaming royalties split between artists and record labels

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In an attempt to ensure fair pay for musicians, UK parliament members are asking the music industry to give artists a higher cut of profits earned from streaming services like Apple Music and Spotify.




United Kingdom government officials are looking to change the way musicians get paid, citing concerns over how streaming funds are distributed. The government had launched the inquiry into streaming service payouts in October of 2020.

According to the BBC, Spotify pays artists between GBP 0.002 ($0.0028) and GBP 0.0038 ($0.0053) per stream. Apple Music pays about GBP 0.0059 ($0.0082.) YouTube pays even less -- about GBP 0.00052 ($0.00072) per stream.

There is some discrepancy in the findings, though, as in April Apple claimed it pays a penny per stream

According to the UK government's findings, artists receive about 13% of the revenue they make off their music, with the rest of the money going toward record labels and distributors. Artists who release their own music or work with independent labels tend to get a higher share, though many of these artists have a more difficult time getting their music in front of potential fans.

Government officials argue that the split should be 50/50 between artists and "rights holders," which has been the established rate for radio play.

"While streaming has brought significant profits to the recorded music industry, the talent behind it - performers, songwriters and composers - are losing out," said Julian Knight, MP, who chairs parliament's Digital, Culture, Media and Sport (DCMS) committee.

Artists such as Mick Jagger and Paul McCartney have called on the Prime Minister to reform the way artists are paid through streaming services. Record labels are arguing against any changes, claiming that giving artists a higher revenue would damage investment into new music.

Parliament is pressing into three major record labels: Sony, Universal, and Warner Music. MPs have accused the record labels of being intentionally evasive about how the industry works.

"Streaming is 24-7 in every country in the world," said David Joseph, CEO of Universal Music UK. "You can listen to the greatest record store ever - it's clearly a sale, it's not radio, it's on-demand."

Representatives from streaming companies have claimed they're more amenable but were quick to point out that most of the money goes to labels and publishers.

"It is a narrow-margin business, so it wouldn't actually take that much to upset the so-called apple cart," said Apple Music's Elena Segal.

Parliament suggests that the government pass legislation to give artists "equitable remuneration," where artists and labels receive an equal share of streaming royalties.

They also suggest that musicians and songwriters should be able to reclaim the rights to their work from labels after a set period of time.

The situation is similar in the United States, with artists earning roughly 12% of music revenue as reported by Rolling Stone in 2018.

According to a report in 2020, Streaming now accounts for 79% of US music industry revenue. That number was up 25% year-over-year.

Purchasing music digitally, however, declined 18% between 2018 and 2019. Streaming revenue first surprised the sales of digital downloads in 2015.

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Comments

  • Reply 1 of 8
    DAalsethDAalseth Posts: 1,725member
    I like the idea, musicians have been getting screwed for decades.
    OTOH streaming from a site in a foreign country, with a company incorporated in a foreign country, and especially if the artist is based in a foreign country, I don’t see how this would be enforceable. 
  • Reply 2 of 8
    So if the findings are that artists are making only 13% off of their music shouldn’t it be that the government enforce a 50/50 split across all distribution forms not just streaming (i.e. CD, Digital Sales, Streaming, etc.)? Wouldn’t that be the most “fair” to the artists?
    iloveapplegear
  • Reply 3 of 8
    how about cd, radio play etc etc. ?
  • Reply 4 of 8
    Or even youtube ?
  • Reply 5 of 8
    gatorguygatorguy Posts: 23,171member
    It may come as a surprise of sorts, but it looks as tho Apple isn't necessarily on-board with a 50/50 split to ensure the musicians and songwriters are paid better. 
    Apple says: "It is a narrow-margin business, so it wouldn't actually take that much to upset the so-called apple cart."
  • Reply 6 of 8
    davidwdavidw Posts: 1,329member
    gatorguy said:
    It may come as a surprise of sorts, but it looks as tho Apple isn't necessarily on-board with a 50/50 split to ensure the musicians and songwriters are paid better. 
    Apple says: "It is a narrow-margin business, so it wouldn't actually take that much to upset the so-called apple cart."
    Did this come as a surprise of sorts or did you just choose to ignore it?  ....

    "According to the BBC, Spotify pays artists between GBP 0.002 ($0.0028) and GBP 0.0038 ($0.0053) per stream. Apple Music pays about GBP 0.0059 ($0.0082.) YouTube pays even less -- about GBP 0.00052 ($0.00072) per stream."   :p 

    That being said, none of these streaming services ....... pay per stream. They pay a percentage of the revenue from subscriptions and/or ad revenue on free streaming. If Spotify subscribers on the average stream more music per month than Apple Music subscribers, then it will calculate out that Spotify will pay less per stream than Apple.  After all, it is advertised as unlimited streaming per subscription. I doubt very much if streaming music would be as successful as it is today, if paying subscribers were limited to how many streams they are allowed, with their $9.99/M subscription. This so that artists are guarantied to be paid a certain amount, per stream.

    Plus, it's up to the publishers, music labels or who ever the streaming services pays for the license to stream music, to split what they receive from the streaming services, with the artist. Why should Apple, Spotify or Google get involve with how their payout for rights to stream music, is split up among those in the music industry?

    It would make no difference on how much these streaming services will pay (for the rights to stream music) if the music industry decide to spit it .... 70/30, 50/50 or 30/70. The government isn't asking the music streaming services to split their payout, 50/50, between the artists and labels or publishers. The streaming services do not know what kind of deal the artist made with their music label or publisher, concerning royalties for streaming their music. Nor would they be allow to change those deals, by demanding that artists gets at least 50% of their payout. 
    FileMakerFellerwatto_cobra
  • Reply 7 of 8
    What gets my goat is the argument that streaming is not analogous to a radio station, but rather to a record store. Really? You're claiming that with a straight face?

    If I go to a record store and buy music, I own a copy of it. I can pretty much do what I like with it, including (with limitations) loan it to a friend.

    The ownership rights for a song I stream? Zero.

    Streaming is exactly like a radio station, except I'm the DJ. Pay the artists on a 50/50 split for streaming, just like for radio.
    gatorguywatto_cobra
  • Reply 8 of 8
    crowleycrowley Posts: 8,739member
    What gets my goat is the argument that streaming is not analogous to a radio station, but rather to a record store. Really? You're claiming that with a straight face?

    If I go to a record store and buy music, I own a copy of it. I can pretty much do what I like with it, including (with limitations) loan it to a friend.

    The ownership rights for a song I stream? Zero.

    Streaming is exactly like a radio station, except I'm the DJ. Pay the artists on a 50/50 split for streaming, just like for radio.
    But the fact that you're the DJ might make it more like you're playing from your own record collection?

    I'm not sure it really works to say it's more like this or more like that, we need to step back and ask if this is the new model, how do we make it sustainable for artists.  If streaming is what 70%+ of the audience are doing, what is fair recompense to musicians for their art that enables the creativity to thrive.

    It sounds like it isn't in the right place right now.  50% is a radical change though, I suspect it'll be somewhere more in the middle.
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