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Ivors Academy calls for regulation of major music firms and new data standards as Parliament again considers the economics of streaming

By | Published on Wednesday 9 December 2020

Houses Of Parliament

Songwriter group the Ivors Academy yesterday called for the major music companies to be regulated and a new minimum viable data standard to be introduced for recordings as Parliament’s Digital, Culture, Media & Sport Select Committee held another hearing considering the economics of music streaming.

Whereas the first oral hearing of the DCMS committee’s streaming inquiry focused on the argument that artists are not getting a fair share of digital income – and the proposal that applying performer equitable remuneration to streams might be a solution in that domain – the second hearing put the spotlight more on songwriters, and their share of the digital pie.

One of the three artists who took part in the proceedings, singer-songwriter Fiona Bevan, stated that “the reality of being a songwriter at the moment is extremely stark because we’re not being paid fairly for our work”. She added: “I recently had a song on a UK number one album, the fastest-selling solo artist album of 2020 [Kylie Minogue’s ‘Disco’], and it will surprise many people that, from what seems like an incredible success, I have only earned £100”.

At the first hearing, MPs were told that part of the problem for artists is the intermediary, ie the record label, who sits between the streaming platform and the recording artist. Although around 55% of streaming income is paid over to the record industry, artists on traditional record contracts will get a minority share of that money.

For songwriters, whose publishing contracts will already pay them a majority of any monies the publisher generates from their songs, the issues are different. First, there is the fact that only 10%-15% of streaming income is allocated to the song rights. And second, the processing of song royalties is super complicated, and money is often lost to the system as it flows from streaming platform to songwriter.

With songwriter payments in the spotlight, the Ivors Academy published more details about its written submission to the DCMS inquiry, and the proposals and demands it has made in that document.

That includes the proposal that major music companies that are in control of large catalogues of songs and recordings be regulated, in a similar way to the music industry’s collecting societies. The Academy stated: “Regulation should ensure adherence to minimum standards of disclosure on interests, policies, payments, and in-kind benefits, including auditing rights for groups of creators. A code of conduct is required to set out minimum standards”.

The Academy’s submission also noted the complexities around the way song royalties are paid – and in particular, the issue that streaming platforms do not actually know what songs are contained in the recordings they stream because the labels and distributors who provide the recordings don’t tell them. The platforms obviously know the song’s title, but some songs have the same title, so what the platform needs is the song’s unique identifier, ie the ISWC.

Because the platforms don’t have this information, publishers and collecting societies have to claim royalties for songs they control based on reports they receive listing every track streamed. Sometimes that results in publishers and societies collectively claiming to control more than 100% of a song, which often results in payments being put on hold. Other times nobody claims a song, and money linked to it ends in the dreaded “black box”.

But what if labels and distributors were forced to provide an ISWC and songwriter information with every track they upload? This could be achieved, the Academy argues, via a new “minimum viable data standard for music recordings”. Such a standard, it adds, “must require basic metadata relating to the underlying composition [be provided] to ensure that fewer streams fall into the unallocable ‘black box'”.

Although songwriters and song royalties were a much bigger part of the debate this time, artist royalties on recordings were also discussed again. As with the first hearing, industry reps said the problem for artists is that contracts and systems designed for the physical era have been applied to streaming. And they have been applied in a way that favours labels over artists, mainly because of the way labels have defined “streaming”.

Music rights expert Maria Forte noted how many traditional record contracts made a distinction between sales income and licensing income, with a much higher royalty being paid to the artist on the latter compared to the former, often 50%. The record industry’s deals with the streaming platforms are clearly licensing deals, yet most labels apply a sales royalty to streaming income. “Why would a stream be a [sale]?”, Forte asked, “I don’t understand that – it’s a licence”.

Talking of defining streaming, José Luis Sevillano of Spanish performer collecting society AIE also argued that the record industry was wrong to define streams as sales. “Streaming is not replacing sales”, he told MPs. “It is replacing broadcasting – and possibly the rental of music”.

Defining streams as a broadcast or even a rental is important in copyright terms, because in both those scenarios so called performer equitable remuneration is paid. That means artists – including session musicians – get a cut of the money at industry-standard rates directly from their collecting societies, oblivious of whatever any record contracts say.

At the first hearing it was proposed ER should be applied to streams, thus ensuring artists automatic payments. That already happens in Spain – albeit in a different way to how ER works with radio in the UK – and Sevillano’s organisation administers the payment of that streaming money to performers.

Elsewhere at yesterday’s hearing there was talk about the need for more transparency, efficiency and accuracy in the way revenues are carved up, and artist and writer royalties calculated and paid.

Nile Rodgers, another of the artists taking part, noted that – while he considers the record labels he works with as partners – “the interesting thing is that, every single time I’ve audited my partners, I find money [I am owed]. Every single time. And sometimes, it’s staggering, the amount of money”.

Artist manager and MMF Vice Chair Kwame Kwaten also focused on inefficiencies and the lack of transparency, stressing the importance of addressing the industry’s “leaky pipes” that result in money getting lost to the system, especially on the songwriter side, and the need for ongoing transparent conversations about how monies should be shared out as the digital market evolves.

That should include a regular roundtable discussion involving all the key industry stakeholders, he argued. Because, while much of the DCMS inquiry has so far focused on Spotify-style streaming, the market continues to diversify, and increasingly important platforms like Triller, TikTok and Instagram operate different models, throwing up a whole load of new questions about how the digital pie should be sliced up.

You can watch yesterday’s session on the Parliament website here. Meanwhile, you can download resources related to the inquiry and follow CMU’s coverage of it via this timeline in the CMU Library.

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