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Major labels face tough questions and frank criticism at latest Parliamentary session on the economics of streaming
The UK bosses of the three major record companies faced some tough questions and frank criticism when questioned by MPs over the economics of streaming yesterday. Some members of Parliament's culture select committee suggested that the record industry chiefs were out of touch with the realities faced by most artists, after the Universal, Sony and Warner CEOs insisted that the streaming business - while still very much evolving - is nevertheless functioning well.

Since the culture select committee began its inquiry into the economics of streaming last year, the conversation has been less about the royalties that the streaming services pay to the music industry, and more about how that money is shared out between artists, labels, songwriters and publishers. As labels often get the biggest share of that money, the general narrative to date has been that a key reason many artists say streaming isn't working is because the labels take too big a cut.

Of course, how big a cut the label takes depends entirely on the deal between the artist and the label, with a general rule that the more services a label offers and the bigger a risk it takes, the more it's going to want in return in terms of rights and royalties.

The labels usually defend taking the biggest slice of the digital pie by focusing on the services and investment they provide artists, and the risks that they take.

Those services and risks provide a boost to the artist's other revenue streams, they'll state. And the profits the labels earn from successful releases allow investment in other artists and other releases, which may or may not prove to be successful down the line.

Plus, they usually add, in the digital age an artist doesn't have to do a traditional label deal to get their music to market if they don't need the services and risk taking a label traditionally provides.

Universal Music's David Joseph, Sony Music's Jason Iley and Warner Music's Tony Harlow all basically presented those standard arguments yesterday.

While the shift to digital has removed the costs and risks of manufacturing and distributing physical discs, Iley insisted that a label's other costs have all increased in a market where more artists and more music are competing for attention.

He said that Sony is investing more into A&R and marketing today than ever before, spending about £20 million a year on both those areas of activity. And Sony Music UK now employs 400 people involved in signing, developing, marketing and promoting new music.

As for choices now available to artists when picking a business partner to work with on their recordings, Iley continued: "There is more competition in the music industry now than ever before in my 30 years of doing this job. The independent sector is a brilliant sector and signs some of the best acts. There is more opportunity for artists to either sign to a major label, sign to an independent label or distribute their own records".

Joseph concurred, adding: "I have never seen a more competitive environment between labels and do-it-yourself options". That results in much more flexibility in deal terms when signing with a record company like Universal Music, he insisted, resulting in "the most competitive environment with so many choices".

That artists have much more choice today when picking a business partner to work with on their recordings is definitely true. Though some argue that because the major labels are so dominant in the marketplace, and they exploit that dominance in a way that makes it harder for independent acts to be heard, that choice is restricted somewhat.

As a result, some new artists are forced into accepting life of copyright assignment of recording rights, 20% royalty rates and steep costs that need recouping - ie a more traditional label deal - in order to achieve success. And once that deal has been done, it's hard for those artists to earn on the streams of their recordings, even if and when success is subsequently achieved.

However, the major label bosses did not agree with that argument. For starters, Harlow denied claims that the majors secure, through their licensing deals, preferential treatment when it comes to curation and playlists on the streaming platforms. Like everyone else, he insisted, the majors secure playlist placements and influence the streaming service algorithms through clever marketing and good storytelling around both new releases and catalogue.

"Three of the most culturally important acts of today - Jorja Smith, AJ Tracey and Skepta - have chosen to sign to a distribution company" instead of a label, Iley added, seeking to prove that significant success can still be achieved by artists who chose not to go the major label route.

"They wanted a bigger share of the revenue and that's their choice - and respect to them and their management. I clearly would prefer them to sign to Sony Music, but they chose not to, and that's the opportunity of choice".

For those artists who are, for whatever reason, stuck in record deals that pay out lower royalties and/or who are still paying back past advances and expenditure, one way they could still benefit from the streaming of their music financially is equitable remuneration, of course. Which is to say, if the system that currently applies to radio - where artists are automatically paid 50% of any income - was applied to streams.

The debate over whether or not ER should be paid on streams often centres on how close the Spotify experience is, or is not, to the radio experience. Or - more specifically - which elements of the copyright are being exploited by a stream, because under law ER currently applies when music is rented, communicated or performed, but not when it is copied, distributed or made available.

This resulted in a discussion yesterday about the differences between Spotify and radio, and whether a stream actually exploits one of the copyright controls already subject to ER.

Given the labels oppose the idea that ER should be paid on streams, the major label bosses were predictably keen to stress that streaming is very different to radio, and that it's definitely the making available element of the copyright being exploited.

Harlow: "It's clear that streams are covered by the making available right - which is the internet equivalent to the sale - because streams are generated by deliberate choices. You can play what you want when you want it - and skip when you don't want. And that's the basis of the argument that streams are the equivalent of sales".

When MPs suggested that playlists, personalised radio and auto-play functions within the streaming services are more like radio, Harlow insisted that experience was still distinct from traditional broadcast.

When an algorithm suggests music, it does so based on the previous choices the user made, he said, and - crucially - with streaming you can skip tracks you don't like and cache tracks you do like on your device for offline listening. "That's not like broadcast", he insisted.

If ER was to be paid on streams, it would be PPL that would administer that for artists. The boss of the UK record industry collecting society, Peter Leathem, was also questioned by MPs yesterday. He declined to express an opinion on whether ER should be paid on streams, but confirmed his organisation could and presumably would administer any new ER revenue stream if it was to be introduced at any point.

A particularly tense part of yesterday's session focused on why, if streaming is working, as the major label bosses insist, so many artists have told the select committee that the current model is broken.

Why have so many artists told MPs that they earn so little from streaming that they rely heavily on live income, which is why they faced such major financial hardship when COVID forced the live industry into shutdown last March? Why is the label view of streaming so disconnected from the artist view? Are the major label chiefs, as one MP suggested, living in "cloud cuckoo land"?

Of course, there are artists - both major label signed and independent - for whom streaming is definitely working, and their voices have tended not to be heard in this inquiry so far.

And with those artists for whom streaming definitely doesn't work, there can be different reasons for that fact. It may be because of their label deal, which means they get a minority share of streaming income, and that is then used to pay off past advances and expenditure. But it might also be because their music doesn't actually stream very well, with streaming only really becoming lucrative once you are achieving millions of streams a month.

Plenty of artists who have been pretty successful in their wider careers don't actually achieve millions of streams each month. Though again, there are different reasons why that might be the case, depending on the artist.

It could be because the artist has a big enough fanbase to sell out a theatre tour but not a big enough fanbase to ensure millions of streams. Or it could be because the artist isn't promoting and marketing their recordings in the right way. Or it could be because the artist's average fan isn't a heavy streamer. Or it could be that the way streaming services curate, recommend and suggest music is skewed against them.

Working out which of those factors are in play is actually quite important. For some artists, making streaming work might require more fanbase building or better marketing. But in other cases, the system is to blame. And in those latter cases, having the industry shift to a user-centric approach of distributing royalties, or reviewing the way the streaming services curate music, might be the solution.

Joseph insisted that he was actually up for reviewing the current system in that way, ie in terms of how royalties are distributed by the platforms and how the services recommend music. The former statement was interesting, given it's generally thought that the majors have been resistant to the proposal that the streaming platforms shift over to a user-centric approach to royalty distribution.

As for the user-experience - and the way music is curated - he said "streaming is still in its early days and isn't perfect yet. I've got tonnes of ideas of how to improve streaming for artists - I want liner notes, I want a focus on albums, I'd like a choice so that, rather than the algorithm, music is recommended by the artists I love and my friends".

We all now await to find out more about Joseph's grand plan for an alternative streaming experience. Although, in the meantime, and despite their various arguments and protestations, it's fair to say that the major label chiefs did little to placate their critics in the artist or songwriter communities yesterday. Or on the select committee, for that matter.

That said, some artist and songwriter reps noted that - given Joseph, Iley and Harlow insisted that the streaming market is still evolving and future evolutions could address some of the issues raised by this inquiry - the major labels should now more proactively engage with artists, songwriters and their managers to map out future changes.

There was, at least, one topic on which the label chiefs and artist and songwriter communities can agree though, which is safe harbour reform.

The music community is pretty much united in arguing that the UK should seek to reform the copyright safe harbour that has allowed some digital companies to underpay - or not pay at all - for music on their platforms. That would mainly involve embracing and expanding on the safe harbour reforms already underway in Europe.

Harlow repeated the common argument that a key way to help artists - and labels - would be to grow the overall pool of digital royalties.

That would be easier, he said, if "YouTube and similar services were not able to use safe harbour provisions" in a way that allows them to negotiate deals that pay out lower royalties. "If the pool grew on the basis of platforms not being able to hide behind safe harbour - that's the most effective thing we could ask for to improve the artist position".

Safe harbours may well be discussed further as the inquiry into the economics of streaming continues, with the digital platforms themselves still to be publicly questioned by MPs. However, none of that is likely to distract the committee from the digital pie debate that has dominated this inquiry to date. And it has to be said, at yesterday's session, the majors didn't seem to successfully justify why they often get the biggest slice of that digital pie.

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Artist and songwriter groups respond to major label statements at select committee streaming inquiry
Reps for artists, songwriters and managers have all responded to yesterday's select committee hearing in the UK Parliament on the economics of streaming, and the remarks made by the UK bosses of the three major record companies. Their respective responses are as follows:

Naomi Pohl, Deputy General Secretary of the Musicians' Union: "The UK major label heads have claimed in these oral evidence sessions that artists are happy with the way streaming revenue is divided up. Given we have had 17,000 petition signatures and the #BrokenRecord campaign has had very wide engagement from artists on Twitter, this seems out of touch at best".

"When asked for their reactions to artists falling into hardship as a result of the COVID-19 crisis, they blamed this on the closure of the live music sector and also stated that they donate to charities and hardship funds for musicians. Of course, if recorded music revenues were paid out fairly to artists then we might not have seen over 20,000 applications to hardship funds in the first few months of the crisis".

"Recorded music must play its part in sustaining the livelihoods of the musicians and songwriters. We can't have labels announcing record profits while our members are quite literally unable to put food on the table. The system is broken and it needs to be fixed".

Graham Davies, CEO of the Ivors Academy: "The select committee is doing a great job getting to the heart of the issues with streaming. Labels and their biggest artists will be content with the current system because it pays them so much. The major labels are resisting change, but change is needed. It is unfair that streaming leaves the majority of creators to have to perform live, sell merchandise or seek donations to make ends meet".

"The select committee heard that labels pay 20% to artists having bought the recording copyright outright. This contrasts enormously with publishing where deals are shorter and the publisher pays 80%. There is enough money in streaming to go around, the problem is too much is going to the labels. Paying more of streaming royalties to publishing will pay more to creators. This is the change we need".

Annabella Coldrick, CEO of the Music Managers Forum: "Time was short and [yesterday's] session covered so much ground, and we look forward to further written answers to some of the many unanswered questions. We were also pleased that the major label representatives acknowledged the need for refinement and evolution in how digital services are licensed and how streaming revenues are distributed. The shortcomings in these areas have been well documented in the MMF's 'Dissecting The Digital Dollar' publications".

"Now this conversation has started, we urge the major music companies to make good on their words and engage in an open dialogue with artists and their representatives about how licensing practices can be made more efficient, more equitable and, most importantly, updated, to ensure streaming and other online music services deliver in full on their potential".

David Martin, CEO of the Featured Artists Coalition: "[Yesterday's] session demonstrated the complexity of music streaming, so I am grateful to the select committee members for their drive and dedication in understanding how it works and how it can be fair and sustainable for the artists and creators that make it a multi-billion-pound industry. I trust that they will continue with this patient and forensic approach to the inquiry, as is clearly necessary to enable the development of meaningful recommendations".

"The witnesses hailed streaming as an innovation which has transformed the music industry and which has more potential still to realise, a view that the FAC would support. The label heads also spoke of their corporations as artist-centric, with artist success and satisfaction at the centre of their business models".

"These are warm words but I now look forward to them demonstrating the sincerity of these claims by taking action to properly engage and remunerate the artist community. They must review how streaming rewards artists, how to distribute revenues fairly and how to ensure that the creators, who make their global music groups billions of pounds in profit each year, aren't in a position where they cannot pay rent".

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CamelPhat launch Sony/ATV publishing imprint
Sony/ATV has renewed and ramped up its worldwide publishing deal with CamelPhat, giving the production duo - aka Dave Whelan and Mike Di Scala - their own publishing imprint in the process. So that's nice. For them.

"David and Mike are heroes in the electronic/dance world, and it is a true honour for us to officialise and step up our relationship", says Sony/ATV UK President David Ventura. "Outside of their CamelPhat artist act, they have been excelling in songwriting and in production, but also in A&R and collaborating with and for other artists. This is only the beginning of an incredible new chapter".

CamelPhat themselves add: "We're really happy to continue working with David and his team. We have known each other for a while now and our admin deal was of great benefit to us as we could see firsthand the team's support and knowledge. We're really excited to make it official, and with our own publishing imprint, it was important for us to help find and nurture the new, fresh and emerging talent. We look forward to what the future holds together".

CamelPhat released their debut album, 'Dark Matter', last year.

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Live Nation takes majority stake in livestreaming platform Veeps
Live Nation has acquired a majority stake in ticketed livestreaming platform Veeps, launched in 2017 by Good Charlotte's Joel and Benji Madden.

"Benji and I have worked extensively with Live Nation over the last two decades and we're very happy to be joining a company that is such a big supporter of artists and artist-led businesses. It's a natural fit and evolution for our business", says Joel of the deal.

Live Nation CEO Michael Rapino adds: "Livestreaming is a great complement to our core business, and essentially gives any show an unlimited capacity. Looking to the future live streams will continue to unlock access for fans - whether they are tuning into a sold out show in their hometown, or watching their favourite artist play in a city halfway around the world".

"The most critical element of live streaming is the artist on stage", he goes on, "and with Live Nation's unmatched inventory feeding into Veeps, together we will help fans enjoy more live music than ever before".

With the COVID pandemic-fuelled boom in livestreaming over the last nine months, Veeps enjoyed its most successful year to date in 2020. It hosted around 1000 shows, largely in the second half of the year, with artists making - it says - more than $10 million on the platform.

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VV Brown to release 'lost' album
VV Brown has announced plans to mark the tenth anniversary of her debut album, 'Travelling Like The Light', by releasing a special edition of the record, as well as her 'lost' second album, a memoir, and (crowdfunding permitting) a brand new record.

If any of this sounds familiar, it could be because this is not the first time she has planned to release an anniversary edition of 'Travelling Like The Light'. The last attempt was scuppered after money raised to create it was lost to the collapse of PledgeMusic. But as an artist who has experienced more than her fair share of hurdles, Brown is not giving up.

Her new Kickstarter campaign aims to raise money to fund the recording of her next studio album. But rewards include a new special edition version of her debut.

"'Travelling Like The Light' was such a special record for me", she says. "We sold a million records worldwide - an achievement I am so proud of - and it really made me who I am today".

Another reward on offer is the follow-up to that debut, 'Lollipops And Politics', which was recorded but never released. "In between my major label and indie transition I created an album that never got released called 'Lollipops And Politics'", she says. "I was really proud of this work but I felt so lost at the time".

Among various formats, there will be a vinyl edition of the 'lost' album made available exclusively for supporters on Kickstarter.

As well as that, you can also get an early copy of Brown's memoir, about which she says "it's a self help book/memoir about my life as a musician and how to navigate through the music industry and all my secrets".

Check out the Kickstarter campaign here.

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IMPALA announces European Independent Album Of The Year Award shortlist
The nominees for this year's IMPALA European Independent Album Of The Year Award have been announced. Rina Sawayama is representing the UK on the list, because - while you can foolishly leave an advantageous political and economic union - you can't leave a continent.

"This year's shortlist includes 25 amazing albums", says IMPALA's Executive Chair Helen Smith. "This is a great opportunity to highlight European independent artists coming from all over Europe. 2020 has been a tough year and this shortlist is an energising way to start 2021".

Last year's winner was Apparat's 'LP5'. Here's this year's full shortlist:

Alejuandro Buendija - Škrinja (Dallas Records)
Alma - Have U Seen Her? (PME Records)
Ane Brun - After The Great Storm/How Beauty Holds The Hand Of Sorrow (Balloon Ranger Recordings)
Aneta Langerová - Dvě Slunce (Art Shock SRO)
Anushka Chkheidze - Halfie (Ces Records)
Balans - Sam Pravm (Kapa Records) Blanche - Empire ([PIAS] Recordings)
Bohren & Der Club Of Gore - Patchouli Blue ([PIAS] Recordings / Ipecac Recordings)
Danny Vera - The New Now (Excelsior Recordings)
Diodato - Che Vita Meravigliosa (Carosello Records)
Dubioza Kolektiv - #Fakenews (Menart)
Fran Palermo - Crocodile Juice Bar (Mzk Publishing)
Kush K - Lotophagi (Blaublau Records)
Majlo - Vestiges: The Scenes (Seagull Ross)
My Ugly Clementine - Vitamin C (Ink Music)
Noiserv - Uma Palavra Começada Por N (Noiserv - SME Portugal)
Repetitor - Prazan Prostor Među Nama Koji Može I Da Ne Postoji (Moonlee Records)
Rina Sawayama - Sawayama (Dirty Hit)
Rone - Room With A View (Infiné)
Sondre Lerche - Patience (Plz/ Edda Music)
Thorbjørn Risager & The Black Tornado - Come On In (Cope / Ruf Records)
Triángulo De Amor Bizarro - Triángulo De Amor Bizarro (Mushroom Pillow)
Valeria Stoica - I Don't Like Roses (Uninvited Artists)
Vlatko Stefanovski - Taftalidze Shuffle (Croatia Records)
Židrūns - Kovārņu Mazbērniem (I Love You Records)

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DEALS

Nina Nesbitt has re-signed her record deal with Cooking Vinyl to release a follow-up to her 2019 album 'The Sun Will Come Up, The Seasons Will Change'. "I'm excited to be continuing to release my music with Cooking Vinyl", she says. "I love the creative freedom and independence I have there and how hard-working and passionate the whole team are".

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APPOINTMENTS

The recently formed management and agency business Mother Artists has hired James Tones as an agent. "I'm so excited to join Mother Artists and start the next chapter of my career as an agent with Natasha [Gregory], Mark [Bent] and the team", he says.

Believe's DIY distribution business Tunecore has officially named Gareth Mellor as Head of Tunecore UK. "The UK is a competitive marketplace, but together with Believe, we can replicate the same success TuneCore has seen globally by engaging in the culture of local artists, providing them with the support they need when they need it, and by treating them - and their music - with the respect they deserve", he says.

Sony/ATV in the US has promoted Audrey Ashby to SVP Business Affairs And Catalogue. "The music business is an amazing field, and every day brings new opportunities", she says. "I want to thank Sony for this opportunity".

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RELEASES

Chai have announced that they will release their new album 'Wink' - their first for Sub Pop and third overall - on 21 May. "A person who winks is a person with a pure heart, who lives with flexibility, who does what they want", say the band, in reference to the title. "A person who winks is a person who is free". Here's first single, 'Action'.

Karen O features on new TRZTN single 'Hieroglyphs'.

Anna B Savage has released new single 'Baby Grand'. Her debut album, 'A Common Turn', is out on 29 Jan. She's also announced plans to tour the UK, including a show at The Lexington in London, in October.

Bradford have announced that they will release their first album for 30 years, titled 'Bright Hours', on 19 Feb. Producer of their 1990 debut, Stephen Street, has also joined the band. Here's new single 'My Wet Face'.

Check out our weekly Spotify playlist of new music featured in the CMU Daily - updated every Friday.

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Donald Trump includes Lil Wayne and Kodak Black among 143 farewell pardons
In the final hours of his presidency, Donald Trump has pardoned rappers Lil Wayne and Kodak Black. Lil Wayne was facing up to ten years in prison on weapons charges, while Kodak Black was already partway through a 46 month jail sentence.

Quashing federal convictions is apparently one of Trump's favourite parts of the presidential job and, according to reports, deciding to whom he should grant pardons on his final day in office has been something of an obsession in recent weeks. While it was expected that Trump would grant up to 100 pardons on his way out of the Oval Office, in the end the list stretched to 143 - 73 presidential pardons and 70 commutations of sentences, to be precise.

Lawyers managed to talk him out of pardoning himself and family members, noting that it wasn't clear that he was legally able to do that anyway, and that doing so might look like an admission of guilt. According to those aforementioned reports, however, pardoning people has so preoccupied Trump's mind of late, he has been offering them to anyone he has had a meeting with - perturbing many of his aides, who didn't believe that they were suspected of any crime.

It was reported earlier this month that Lil Wayne and Kodak Black were among those being considered for last day presidential pardons.

Lil Wayne was arrested in December 2019 after a gun and ammunition were discovered on a private jet he was using. Already convicted of earlier firearms charges, he was facing a prison sentence of up to ten years, having pled guilty to the new charges last month.

Expectations that the rapper would receive a pardon from Trump grew after Lil Wayne tweeted in October that he'd had "a great meeting" with the president. He commended Trump for "what he's done so far with criminal reform", and said that he was confident that further improvements would be made if he won a second term.

In a statement this morning, the White House praised Lil Wayne's "commitment to a variety of charities, including donations to research hospitals and a host of foodbanks".

Kodak Black, meanwhile, was jailed last year for falsifying paperwork to obtain a firearm. As part of a plea deal, he had his sentence reduced to 46 months. However, more recently various friends of the rapper - including fellow performers Gucci Mane, Lil Pump and Lil Yachty - have been lobbying the president to commute his sentence. Announcing that this request had been granted, the White House praised Black's "numerous philanthropic efforts".

And so Trump's stint as US President ends with one of the stranger traditions regarding the US presidency, made all the more stranger by the way Trump carried it out. Technically, he still has a few more hours in which he can add more pardons to the list. And you probably shouldn't rule out some sort of final drama before power is officially handed over to Joe Biden.

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