News that the House Of Commons Digital, Culture, Media & Sport Committee will investigate the streaming sector raises the prospect of big changes in digital music. In her latest must-read Music Week column, Deviate Digital CEO Sammy Andrews looks at the big issues likely to crop up…
So 2020 continues to be the year where anything and everything could happen, and sometimes does all at once! The recently announced DCMS Committee inquiry into the economics of streaming is certainly not something we thought we’d see while in the grip of a pandemic.
Some cynics have suggested that the investigation is merely a bone being thrown to artists by the government after concerns around how they’ve handled creatives (as opposed to cultural institutions and venues) since the initial lockdown. Others believe it’s a long overdue opening of ‘Pandora’s black box’. Whichever, it’s happening and there are a lot of opinions, painful truths and revelations about to be flung around in public... And in Parliament.
We have songwriters, PROs, CMOs, major labels, independent labels, DSPs, legacy artists, new artists, lawyers, publishers, managers and more all wanting to voice their opinions.
Personally, my concern is that, unless key stakeholders align on something achievable, there is a danger of an unseemly slanging match that leaves our industry looking like squabbling children in the digital playground. However, it’s necessary that these issues are aired publicly, in the hope that a forensic exploration might lead to significant progress.
There is a danger that our industry stakeholders are left looking like squabbling children in the digital playground
Sammy Andrews
So here’s a rundown of the more pressing subjects, and my view on where there’s likely to be discord or harmony…
Black box income & accounting transparency
Issue? Yes. Solvable? Yes. Does everyone agree? No.
How ‘unattributed’ or ‘black box’ income is dealt with has long been a major bone of contention. There are some who allege that inefficiency and opacity is simply another opportunity for stakeholders to profit. At the very least, the lack of transparency around how this is dealt with and the underlying quality of the data has to be examined.
A new national Copyright Directive
Issue? Yes. Solvable? Yes. Does everyone agree? Yes (kind of).
Some parties in the music industry were concerned the EU Copyright Directive was too beholden to the lobbying by certain tech platforms. Whilst not exactly written on the side of a big red bus, the UK Government is taking the opportunity of Brexit to diverge from the EU CD, which means there’s a chance of a more industry-friendly approach in a national UK Copyright Directive.
Equitable remuneration
Issue? Yes. Solvable? Possibly. Does everyone agree? No.
Broadcast is licensed collectively, centrally and, for sound recordings, triggers a right of ‘equitable remuneration’ for performers, where they have a right to receive an equal share, direct, without reference to their label contracts, royalty rate or recoupment status. But streaming services tend to be licensed directly and paid in accordance with their contracts. Many artists argue that, as digital services become increasingly radio-like, the distinction is artificial and, where music is not accessed ‘on demand’, an equivalent right should exist.
Digital royalty rates for legacy artists
Issue? Yes. Solvable? Yes. Does everyone agree? No.
Heritage acts often receive low royalty rates more appropriate to the physical product era, or are recouping old expenditure against those royalties. Notable exceptions exist, predominantly in the thriving indie label world or where an artist has renegotiated, but there’s no consistent policy throughout the industry.
Who owns what?
Issue? Yes. Solvable? Yes. Does everyone agree? No.
The equity stakes held by majors in services, plus the acquisition of stakes by some companies across multiple rights-holders, has led to concerns over how arm’s length future deals might be.
User-centric vs pro rata market share payouts
Issue? Yes. Solvable? Yes. Does everyone agree? No.
Tests have been run for some years now for label data around user-centric payments, but this has not been done at scale for artists. Deezer has tried to move to a user-centric model but is rumoured to have been held back by some of the rights-holders they’re licensing from. Other DSPs seem agnostic, as they’re liable to pay either way… So where do the issues lie?
Global one-stop licensing
Issue? Yes. Solvable? Yes. Does everyone agree? No.
Another big, fat elephant in a room full of big, fat elephants. Watch this space!
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