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Economics Of Streaming Perspectives: BPI

By | Published on Thursday 1 June 2023


Following the announcements this week about the ongoing UK government-led economics of music streaming work, we spoke to representatives from some of the organisations involved in that work to get their perspectives on what has been achieved so far and what should happen next.

This time Sophie Jones, Chief Strategy Officer + Interim CEO at BPI, the trade body for the UK record industry, speaking for the major record companies as well as many independent record labels.

What do you think have been the most important aspects of the IPO led projects that were instigated after the select committee inquiry?
The IPO-led process has provided an opportunity for stakeholders to interrogate the concerns raised during the Select Committee process and create an independent evidence base to inform further discussions.

Excellent progress has been made on metadata in terms of codifying good practice that can be actioned now by everyone in the value chain. The group has also devised a programme of ongoing work to drive further improvements over the next two years. This promises to make payments to songwriters and the DIY market faster and more accurate.

We are also working with the IPO to finalise a code of practice on transparency, an industry first, and a great collaborative effort from all participants. The code will set a common standard for transparent communication across the music supply chain, while safeguarding privacy, confidentiality and competition.

The BPI and our label members are pleased to have played an important role in enabling progress to date.

What do you think should be the priorities of the music-maker remuneration working group that is now being convened?

• Ensure any discussion is evidence-based from the outset, making use of the research that the IPO, the CMA and independent analysts have collected over the last three years and that this process does not revive subjective and flawed arguments about the market made during this time.

• Consider the interests of all artists, including in particular the next generation of talent, and to acknowledge the steps the industry has already taken in relation to legacy artists.

• Discuss ways to grow artist/wider industry earnings by addressing problems in the market such as over-supply of the streaming market; piracy; stream manipulation; AI clones and deep-fakes; failure of subscription prices to keep up with inflation; and the low value of return from short-form platforms.

• There should also be scope to look at ways to boost the many non-streaming earnings that artists can generate, such as from live and touring, merchandising, sync, brand partnerships, and the many other diversified ways in which artists can support their careers.

• Agree steps to grow the industry through supporting exports and promoting investment – with this being the only way for artists to earn more without negatively impacting investment in new talent and to maintain the UK’s strong position globally.

• Shape a common approach to safeguarding human artistry in the era of artificial intelligence – this being the most urgent and pressing issue facing creator remuneration today.

The IPO has already undertaken research on the three copyright reforms proposed by the select committee – ie reversion rights, contract adjustment rights and performer ER. What is your current position on those proposals?
Whilst well-intentioned, the suggestions made by the Select Committee did not consider the unintended consequences of certain proposals. These are fraught with fundamental problems and complexities and actually risk harming the artist community they seek to benefit and make the UK a less appealing place to invest in music. The only winners would be collecting societies and litigation lawyers.

Economic modelling has shown that all versions of ER lead to a decline in earnings for artists either in the short term or in the medium to longer term through reduced investment. Rights reversion and contract adjustment would: undermine legal certainty and the ability to invest in new music and emerging talent; reduce the choice of deal types currently available to artists; and put downward pressure on upfront advances. It risks seriously undermining the prospects for a successful UK music industry.

There has been a lot of discussion of late about reforming the way streaming monies are allocated to individual tracks and catalogues. How can the ongoing economics of streaming work in the UK inform and influence that conversation?
It probably needs to work the other way round – in other words, evidence emerging from the detailed studies, analysis and trials happening already across the industry, often in dialogue with streaming services, should inform and influence discussions in the ongoing government-led process.

How do you think the undertakings in the metadata code will impact on the way streaming services work and music-makers get paid?
The code sets a clear expectation of good practice, with specific obligations on specific players in the value chain. We hope to see some immediate improvements as a result in terms of the speed and accuracy of songwriter payments.

Further progress should come over the next two years through exploring better ways to link ISWCs to ISRCs coupled with raising awareness among creators of the importance of agreeing creative contributions and splits and inputting their data as early as possible.

How can your members help ensure the metadata code has the maximum impact? What measures would you encourage them to implement?
We are encouraging all of our members to adhere to the code and to field the right people to shape the ongoing discussions over the next two years.

We will be hosting a training session for our independent members to talk them through the code further and support them further as they take this forward.

How can other stakeholders in the music community ensure that the metadata code has the maximum impact? What measures would you encourage them to implement?
Similarly to above, we would encourage everyone to get behind the code and the ongoing work programme. A lot of time and effort has been spent to bring something together that has cross-industry input, it would be a shame to see this not be taken forward in the way it has been intended.