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UK government pledges “meaningful and lasting improvements” in latest response to economics of streaming inquiry

By | Published on Tuesday 28 March 2023

Houses Of Parliament

The UK government has formally responded to the follow-up report published by Parliament’s culture select committee earlier this year on the whole economics of streaming debate. In its response, the government commits to providing more information about ongoing work around data and transparency, while admitting that it is still considering what the next steps should be regarding artist and songwriter remuneration.

The select committee called for a “complete reset” of streaming in its original report on the digital music sector in July 2021, which followed an extensive inquiry into the way the streaming music business works, and all of the issues that have been raised about the current model by artists, writers and their managers. MPs proposed various measures to address the issues including some possible reforms to copyright law.

In response, the government’s Intellectual Property Office instigated three strands of work seeking voluntary agreements within the industry on data, transparency and remuneration.

The Competition & Markets Authority also undertook a market study to assess if any of the issues were caused by anti-competitive conduct – concluding probably not – while the government’s culture department commissioned a research report on playlists and algorithms, which was published last month.

The IPO-led work is now the focus. At an update hearing late last year, select committee members heard that some progress has been made on data and transparency, although both are still a work in progress. And some MPs expressed concerns that, somewhat ironically, there wasn’t enough transparency about the work on data and transparency.

Meanwhile, artist and songwriter groups said no real progress had been made on music-maker remuneration – for them the most important issue – beyond the commissioning of research to investigate the various copyright law reforms that had been proposed by MPs.

And, based on a more recent update last week from the Council Of Music Makers – which brings together organisations representing artists, musicians, songwriters, producers and managers – that remains the current situation.

In that particular update, the CMM set out its top five priorities for all of this economics of streaming work. In addition to improvements around data and transparency, it called for all artists to receive a minimum digital royalty rate, a better deal for session musicians, and a system via which artists and songwriters can force a renegotiation of outdated old contracts.

Many indie labels already pay a minimum digital royalty rate, and record industry trade group BPI has been in negotiations with the Musicians’ Union around session musician rates. And the majors would point out that, while they currently oppose a minimum digital rate, they are now passing through royalties to heritage artists that were previously still paying off recoupable costs on old record deals.

The CMM would certainly acknowledge all that, but still argue that a lot more needs to be done on remuneration, and that government should therefore ramp up its work in this domain, while also further considering the copyright law reforms proposed in the select committee’s original report.

Following last year’s update hearing in Parliament, the select committee published a short follow-up report in January which said there should be more transparency around the IPO-led work, that relevant ministers should get more actively involved, and that there should be more focus on the all important issue of remuneration.

It was that follow-up report that yesterday’s government statement was responding to. It begins with a quick summary of all the work to date, including that led by the IPO, CMA and culture department. But there is more to be done, it concedes, because “for this work to have been worthwhile, it must result in meaningful and lasting improvements to streaming”.

As for providing more public information about all that work, it points out that the IPO has already made available a list of the people involved in the working groups that have led on the data and transparency work, while agendas and minutes from the meetings of those groups will also be made public. And both ministers and government officials continue to play an active role, it insists.

As for the less-progressed remuneration conversation, the government says that it “recognises that creator remuneration is a key issue in the music streaming debate and one which warrants attention”.

“While the research commissioned by the government into the changes to copyright law recommended by the committee was ongoing, the government considered it appropriate to defer detailed conversations on different approaches to remuneration, to ensure that discussions on this topic are properly informed by evidence”, it adds

“Now that the research into equitable remuneration is in its advanced stages and the research into contract adjustment and rights reversion has been published”, it goes on, “the government is considering its approach on performers’ rights and remuneration and will take a decision on these matters in due course”.

Responding to the government’s response, the acting chair of the culture select committee, Damian Green MP, says: “We are pleased that the government has promised to deliver ‘meaningful and lasting improvements to streaming’ in its response to our follow-up report on music streaming. Our initial inquiry called for a ‘complete reset’ of streaming in response to issues facing professional musicians and independent companies in the sector, highlighting the need for equitable remuneration”.

“Publishing information about the work of the industry contact group, transparency and metadata working groups and research projects on remuneration and rights reversion will move the debate and policy discussions along”, he then adds.

Green then reminds everybody that, with the main development on music-maker remuneration so far being the commitment by the majors to pay through royalties to unrecouped artists, “our follow-up report requested that the three major music groups provide evidence of royalties that are being paid to legacy artists following recommendations during our initial inquiry”.

He then concludes: “The committee wants to see concrete action from government, regulators and the industry in response to its reports, and will continue to monitor the position closely”.