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IMPALA again confirms opposition to ER on streams, while calling for focus on music’s “investment stream”

By | Published on Friday 14 October 2022


The pan-European trade group for the independent music sector, IMPALA, has again voiced its opposition to the extension of performer equitable remuneration to streaming, while calling for “all labels to pay fair contemporary digital royalties” to artists.

It also urges those European Union member countries yet to implement the 2019 copyright directive to hurry up and do so, while encouraging governments across Europe to consider financial support measures for the record industry similar to those available in France.

IMPALA’s latest statement regarding the economics of streaming follows a recent review of the organisation’s digital strategy at the Reeperbahn festival, and builds on the ten point plan to “make streaming work” that it published in March 2021.

Applying the ER principle to streaming has been proposed many times over the years as artists – and especially heritage artists stuck in pre-digital record deals – have complained about the cut they receive of any streaming income generated by their recordings.

The ER system currently applies to things like radio. Performers have their own statutory right to payment under copyright law in those scenarios, meaning they get paid at industry standard rates via the collective licensing system, instead of via their labels at rates set out in a record contract.

If ER was applied to streams, performers would get their cut of streaming income – or more likely part of their cut of streaming income – via the collective licensing system at industry standard rates.

ER on streams already applies in Spain and Hungary, and recent changes to the law in Belgium mean it will be introduced there too. In Germany, ER is being introduced in relation to user-generated content platforms.

Labels – major and indie – oppose the extension of ER to streams, saying that it would impact on their ability to invest in new artists. They also argue that – especially once the admin costs of an ER system are taken into account – artists on more favourable record deals, or who are releasing music through their own labels, could actually be worse off if they got some of their streaming income via their collecting societies.

The biggest beneficiaries of ER on streams would likely be artists stuck in old record deals which pay much lower royalties. Though some indies already apply a higher minimum rate – basically a modern streaming rate – across their catalogues, oblivious of what specific rates are set in old deals. And many in the independent community see approaches like that as a better solution to issues around fair remuneration.

In its new statement on streaming, IMPALA notes that – since the publication of its ten-point plan last year – “there have been renewed requests from artist groups, collecting societies and publisher groups to rethink the allocation of digital revenues. This includes demands for a radio type of remuneration, where performers and artists would go through their local collecting society for at least part of their streaming income – so called ‘equitable remuneration'”.

ER, it says, “is not backed by any figures about investment or risk and was rightly rejected in the last EU copyright review”. And it would also “hurt labels’ investment capacity, damage the high growth sector of self-releasing artists, [and] leave creators’ incomes at risk from erratic voting rights and distribution laws within some societies. This in turn would have a negative impact on diversity, something which will also be raised in IMPALA’s upcoming report on its equity, diversity and inclusion work”.

IMPALA most recently commented on this debate after Belgian law-makers added an ER right for streams , a development that occurred about a month after the French music industry reached a voluntary agreement around artist remuneration.

The indie community very much support the latter approach. “Pointing to industry negotiations like those in France as opposed to blanket imposition of new rights like in Belgium”, the new statement says, “IMPALA notes it is time for difficult conversations where the independent sector stands up and calls out so called ‘equitable remuneration’ for simply not being equitable”.

Beyond the ER debate, IMPALA also calls on governments across Europe to ensure that the provisions increasing the liabilities of user-upload platforms contained in that 2019 directive are properly put into place – not least because some EU member states are still implementing said directive. Plus, both industry and government, it says, should focus on growing the “investment stream”.

“We have heard a lot about the digital pie but less about the investment stream”, it goes on, “the term IMPALA uses for the financial resources and knowhow which labels make available for nurturing new talent and projects. Pointing to France as the best in class, IMPALA calls for every country to put in place a system of tax credits, favourable loan guarantees and other fiscal tools to boost investment in the recording sector and have a strategic approach in place for growth”.

Commenting on all this, IMPALA’s Executive Chair Helen Smith says: “We have to work together to grow the digital market and make sure all can benefit. It’s our responsibility. After weathering through a two year plus pandemic, the whole sector is now facing a cost-of-living crisis”.

“We also need governments to play their part”, she adds. “We ask member states who still have to implement the copyright directive to do it swiftly and stick to the text to ensure maximum harmonisation. We also call on the industry and decision makers to look at the investment stream and develop a key strategy that seeks to grow risk-taking in the European music sector”.