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MPs again call for performer ER on streams as Universal boss’s £150 million pay packet is compared to songwriter earnings

By | Published on Thursday 11 November 2021

Lucian Grainge

MPs and artist groups have again called for changes to UK copyright law to get a better deal for music-makers in the streaming domain, this time in the wake of a new stat comparison that’s doing the rounds, comparing the expected pay cheque of Universal Music boss Lucian Grainge this year to the total monies all songwriters earned from the sales and streams of their songs in the UK in 2019.

This is based on reports that Grainge’s total earnings this year will be in the region of £152.7 million, thanks to an insane £123 million bonus package following Universal’s Music Group’s successful stock market listing and earlier deals with Tencent.

Meanwhile, the recent ‘Creators Earnings’ report from the UK’s Intellectual Property Office estimated that the earnings of all songwriters combined from the streaming, downloading and physical sales of their songs in the UK in 2019 was £150 million.

This single stat comparison – MPs, and groups like the Ivors Academy and Musicians’ Union, argue – illustrates the massive inequities in the music industry.

Corporate rights owners and their senior management teams are cashing in on a surge in value for their vast catalogues, which is mainly the result of a quirk in the streaming business model, rather than any genius on their parts. Artists and songwriters, on the other hand – many of whom see only a minority cut of streaming income – are left struggling.

Obviously, these inequities have been very much in the spotlight over the last two years, in no small part because of the impact of COVID on all the other music industry revenue streams, which in turn motivated the #fixstreaming and #brokenrecord campaigns, and the big old parliamentary inquiry into the economics of streaming.

The UK government has now convened a music industry contact group – and is putting together some working groups and commissioning some research – to assess the recommendations made by the parliamentary inquiry.

That includes considering changes to copyright law that could enable artists to renegotiate old record contracts or reclaim old copyrights. Or which would apply performer equitable remuneration – the system currently used with broadcast and public performance revenues – to streaming. Which would mean that at least some digital income would flow to artists directly through the collective licensing system, rather than being subject to the terms of their record contracts.

For songwriters, the priority is a further re-slicing of the digital pie, so that more streaming money would be allocated to the song rights instead of the recording rights. Currently 50-55% of the total digital pie is allocated to recordings, while 10-15% goes to songs.

Although the government – in its response to the parliamentary inquiry – said more work needed to be done in order to asses the pros and cons of applying performer equitable remuneration to streams, support for that approach is building in Parliament.

A private members bill that will formally propose changing copyright law to that effect will have a reading in Parliament next month, and recently 44 Conservative MPs expressed their support for Performer ER on streams in a letter to Prime Minister ‘Boris’ Johnson.

The MP who led on that particular letter, Esther McVey, is among those to comment on the Grainge-earns-more-from-recordings-than-all-UK-songwriters-combined stat.

She said yesterday: “It’s shocking that record label owners are earning more out of artists’ works than the artists themselves. Those who create and perform music should reap the rewards of their talent and hard work. We’ve got to put this right, to fix streaming so that it pays more like radio and get back to the notion of fair day’s pay for a fair day’s work”.

Echoing another letter sent to Johnson earlier this year on Performer ER – that one signed by a stack of artists – McVey argues that introducing a remuneration system of that kind requires a very simple change to UK copyright law, basically so that the ER principle also applies to the ‘making available’ element of the sound recording copyright.

Which technically speaking is true. Although that legislative change wouldn’t actually provide any insight on exactly how performer ER on streams would work in real terms, and it’s the specifics that would identify who the winners and losers of such a system might be.

Nevertheless, McVey added yesterday that fair pay for artists can be achieved “by implementing a really simple fix that changes two words in the 1988 Copyright, Designs And Patents Act. It won’t cost the taxpayer a penny, will give British artists a bigger share of the proceeds of their talents, and put more tax revenue into public services like the NHS”.

“Two words”, she continued, “that’s all it will take to put more money in the pockets of British musicians, to strengthen our world leading cultural sector, and to allow the market for recorded music to flourish for listeners once again. British cultural heritage is under threat, and it’s time to step in and put it right”.

Confirming that these proposals have cross-party support, Labour MP Jo Stevens also said: “When music lovers stream their favourite tracks, they expect those who made the music to be fairly paid. But the reality is artists get a pitiful amount while streaming sites and record companies cash in. It’s clear that the industry has failed to reform the system and the government has acquiesced in this. So we need legislation and that’s why Labour has supported the Musicians’ Union, The Ivors Academy and #brokenrecord campaigns to fix this”.

Also commenting on the Grainge/songwriter earnings stat yesterday was Ivors Academy Chair Crispin Hunt, who said: “This is evidence of a business which is completely out of control. For songwriters who are struggling to make a living, there’s only one word for it – obscene. The music industry has a problem and creators, the public and politicians know it. That one music executive earned [in one year] more than all the songwriters in the UK [in 2019] tells us that this problem is getting worse”.

“We have been warning about a lack of balance where major music labels make unwarranted profits and this latest boomtime announcement reinforces this message”, he added. “Songwriters, composers and musicians are the true providers of the music economy, without them there are no jobs and no salaries in music. Music’s creators are being exploited”.

Meanwhile, Musicians’ Union General Secretary Horace Trubridge added: “The status quo in the music streaming sector – where most revenues go to the record labels and multinational music groups – has been exposed as indefensible.”

“To the best of my knowledge Sir Lucian has never played or written as much as a note of music. No one buys his records or queues for his gigs, yet he enjoys rewards and riches beyond the wildest dreams of even our most popular artists and writers. There is no other industry anywhere in the world that would tolerate this gross unfairness and it has to stop now”.

“The domination of the major music groups in the streaming market is transparent and runs counter to the interests of our fantastic British performers. Now is the time for the government to address these imbalances in the sector”, he went on.

“Reforms such as securing equitable remuneration for performers, improving contract terms, and increasing the music publishing share of streaming revenue would go a long way to transforming the UK into the best place to be a musician, songwriter, or composer in the world. What is needed is a complete reset of the system to ensure that our brilliant musicians are fairly and properly rewarded for their work”.

Debate continues within the wider music community regarding the extent to which performer ER would actually solve the problem – with some expressing concerns that some new artists would actually be worse off under that system. Maybe someone should try to force the majors to link executive bonuses to the amount of artist and songwriter royalties those companies have paid out in any one year. Now that would be interesting.

UPDATE 12 Nov 2021, 1.00pm: Updated to clarify that the £150 million cited in the IPO’s ‘Creator Earnings’ report was the estimated amount due to all songwriters from the streaming, downloading and physical sales of their songs in the UK in 2019 (rather than the income of UK songwriters specifically from the global usage of their music, as previously implied).