THURSDAY 18 APR 2024
Earlier today the UK government convened Creator Remuneration Working Group met for the first time. Part of the ongoing Economics Of Music Streaming programme of work, this group will consider the issues regarding how music-makers are paid when their music is streamed.
Four CMM organisations are part of the working group and below is a statement they delivered at the first meeting setting out the core objectives of the music-maker community.
————————————————
The success of music streaming has delivered massive financial gains for the recorded music sector and wider music rights business.
According to IFPI data, record industry revenues have increased every year since 2015. Over that time the sector has seen its annual revenues more than double to $28.6 billion.
The economist Will Page estimates that the total music rights sector – including both recordings and publishing – generated $41.5 billion in 2022 – and he previously observed that “music copyright has never had it so good”.
On the back of this substantial growth, two of the major music rights companies have undergone very successful public listings in the last five years. In the year of Universal Music’s IPO, its CEO Lucian Grainge received a reported bonus of £123 million.
And yet, as the CMS Select Committee noted in 2021 – and again last week – many music-makers are simply not seeing the benefit of all this growth.
The recent Musicians’ Census of 6000 musicians in the UK showed an average income of £20,700 from their music work. This is the same average income evidenced in a Musicians’ Union survey from 2013, ten years beforehand.
Now, it is true that a very small group of premiere league music-makers – the creators of some of the greatest songs in human history – have been able to negotiate lucrative deals around their rights.
It is true that the streaming market is incredibly competitive – and for some music-makers the challenge is standing out and driving streams.
It is also true that an entrepreneurial music-maker picking business partners today can – in partnership with a savvy management team – negotiate deals that allow them to truly benefit from their streaming success.
These music-makers are the exception, not the rule.
There is a large group of music-makers whose music is heavily streamed, and who are delivering significant value for streaming services and corporate rightsholders, but who are not sharing in that value in an equitable way.
Why? Because they are locked into long-term – often life of copyright deals – with business partners which have chosen to apply contract terms and industry conventions of the old world to the new world. They did this with zero consultation with the music-maker community, and zero communication of the decisions which were taken unilaterally.
It is these music-makers that we should be focusing on in the first phase of this Creator Remuneration Working Group.
Where the government has intervened in the past to deliver royalties to creators from new exploitations of their work, for example the public lending right for authors and the artist resale right for visual artists, we ask you to do so again.
The organisations that make up the Council Of Music Makers have three main objectives, which we will now talk through.
————————————————
The Council Of Music Makers published its five fundamentals for music streaming in March 2023 – and the first three of those fundamentals relate to remuneration.
So, these objectives have been clear for more than a year now.
First, there should be a modern minimum digital royalty rate for ALL featured artists, with unrecouped balances written off after a fixed period, on a rolling basis.
While artists negotiating new records deals today may be able to secure a fair share of streaming income, artists locked into older deals are often getting a much smaller share, because their labels are applying CD royalty rates to streams. As a result some artists still receive a single figure percentage share. There should be a modern rate for all.
The independent labels actually endorse our position on this already. IMPALA – the pan-European organisation of which AIM is a member – already states that labels should “pay artists a fair contemporary digital royalty rate”. Many indies already apply this policy, including the Beggars Group, who we will hear from in this remuneration working group.
For this to benefit all featured artists, labels should also pay through on unrecouped artist accounts after a set period of time, without attaching punitive, additional conditions. Remember, a label usually profits on its investment in an artist long before the artist recoups. Unrecouped does not mean unprofitable.
This should be a rolling commitment – so every year more artists qualify – like the commitment made by many indies and Sony Music. We can hopefully hear from Sony about the way it implements this commitment in this group.
Second, there should be equitable remuneration, or an equivalent remuneration fund, to benefit all performers who appear on a sound recording, including session musicians.
The BPI / MU minimum session rate, which we are currently struggling to renegotiate, is £130 for a three hour session during which 20 minutes of music can be recorded. Even a long-established session musician with a higher going rate may only command in the region of £500 for a session.
If a recording is broadcast on the radio or played in public the performer receives additional remuneration, but if it is streamed, they earn nothing. So the 40 session musicians on Ed Sheeran’s ‘Perfect’, which streams more than a million times a day, receive no remuneration from those streams.
This is inequitable and unsustainable, and that fact is being recognised across the world. Countries that now provide some kind of statutory remuneration for all performers from at least some digital platforms include Belgium, Brazil, Germany, Hungary, Lithuania, Mexico, Slovakia, Slovenia, South Korea, Spain and Uruguay.
We actually already have a session musicians fund here in the UK for recordings that are over 50 years old, which is managed by PPL. So the principle and the framework already exists here, we just need to extend the principle to all recordings and agree a suitable framework for delivering on that principle.
Why should session musicians receive an upfront fee, no sales or streaming royalties for 50 years, and then suddenly they kick in, in some cases post-death?
PPL will be able to tell us more about the existing fund within this working group.
Finally, we need rights of contract adjustment and rights reversion, which are already available to music-makers in the US and some EU territories. The Intellectual Property Office has already undertaken an excellent study on how these rights can work and which evidences precedence for such measures.
These rights would allow music-makers to reclaim copyrights previously assigned to business partners after an agreed period. Contract adjustment would enable artists and songwriters to renegotiate old deals in the context of the modern music business.
No music-maker should be tied into a deal for their lifetime without the ability to take back control of their music or renegotiate outdated terms.
So, to summarise our main objectives…
One: Modern digital royalty rate for all featured artists with rolling commitment to pay through on unrecouped balances.
Two: Equitable remuneration or an equivalent remuneration fund to benefit all performers, including session musicians.
Three: A right to contract adjustment and rights reversion.
————————————————
It’s four years since the launch of the #BrokenRecord campaign.
It’s nearly three since the select committee called for a “complete reset” of streaming.
Two since a bill was put before Parliament and the government conceded there was absolutely a problem with creator remuneration and began this process.
It’s eighteen months since the Competition & Markets Authority said “there remains a broader policy debate to be had about the optimal distribution of streaming revenues”.
It’s almost a year since we were told this working group would be convened.
We think it’s fair to say that the music-maker community has been very patient, but that patience is wearing thin. The select committee last week set a twelve month deadline to address these issues and put in place solutions, so we really need to get down to business.
We think we need to focus. There are lots of other issues with streaming that are important to music-makers, but which we are not here to talk about and we will not discuss.
We’re not here to talk about streaming price point.
We’re not here to talk about how streaming services allocate monies to each catalogue.
We’re not here to talk about AI or piracy or safe harbour.
We are here to ensure that the music-makers whose music is being streamed are fairly remunerated, irrespective of when deals were done with labels or publishers.
That means achieving the three main objectives that benefit all music-makers set out here today. We should also review the more sector specific recommendations that were made in the select committee’s latest report, like songwriters receiving a per diem to cover their basic costs.
I should add, we’re also not here to simply bash record labels, music publishers or platforms. These are key business partners for us, and we recognise the importance of the investment, attention and support they provide.
However, music-makers are always the initial investors – they consistently invest in their own businesses, and in the other musicians and music companies that they hire and engage.
When music streaming first emerged in the 2000s, music-makers were not consulted on the business model, and a number of unfair and unsustainable decisions were made by a small group of major players, whose industry was admittedly in crisis. That crisis is now long forgotten, but the bad decisions haven’t been reversed.
As we mentioned, these issues are now being addressed around the world, and we have an opportunity here to solve the problems in the UK and ensure we remain a competitive marketplace for music-making.
We know this can be done through changes to copyright law. We also know that a future Labour government would be minded to legislate. But we also know that the current government and industry would prefer voluntary solutions.
Playing hardball in undisclosed commercial settings is understandable, but, be under no illusion, when we are here to help tens of thousands of struggling self-employed creators and SMEs in the UK, those behaviours can easily be taken for intransigence. So let’s use this working group to deliver solutions. Over to you.
