Music industry ponders change of tune on streaming rewards

The music industry has spent years trying to distance itself from the image of unscrupulous record label bosses and sweet-talking agents taking advantage of the artists and songwriters producing the hits.

Yet a report compiled by UK lawmakers this week painted a picture of a broken model that is still failing to reward musicians fairly — one in dire need of a “complete reset” — in the golden age of streaming.

Eight months after frustrated musicians and songwriters, record company bosses, industry accountants and streaming executives began giving evidence, with some providing impassioned accounts of how they were struggling to make a livelihood, the Department for Digital, Culture, Media and Sport select committee has come down firmly on the side of the artists.

Musician and producer Nile Rodgers called it a huge victory for his peers as long as the recommendations were acted upon. “I want to believe in my optimistic heart and soul that things will change,” he told the Financial Times. “The disparity between what a record company makes and what artists and producers get is incredible.”

He had provided evidence to the committee about how the streaming boom has revived the industry, but also widened the gap between what record companies are making and what is trickling down to artists.

It remains to be seen whether the UK government will act on recommendations or whether the competition watchdog, which was asked to open an investigation into the sector, will do so, given the industry has only just emerged from a two-decade slump on the back of piracy.

The Competition and Markets Authority said it “strongly supports competitive digital markets”. It added: “We will consider carefully the recommendations in the report that relate to the CMA, and we will work with DCMS to respond to these in due course.”

Merck Mercuriadis, founder of music publishing company Hipgnosis of which Rodgers is also an adviser, said he hoped the radical changes proposed would have a global clout, akin to the 1960s “British Invasion” of UK groups across the globe.

“This little island created music that permeated throughout the world and continues to do so. The decisions and actions of these politicians will also permeate around the world,” he said.

But the mixed reception more broadly — not just between big music labels and artists, but between solo artists themselves — highlights the challenges ahead.

The “BrokenRecord” campaign, which has pushed for a greater share of streaming income to be paid to artists and counts Sir Paul McCartney and Kate Bush among its supporters, was quick to hail the impact of the report into a “failing industry”, said founder musician Tom Gray.

“I want to believe in my optimistic heart and soul that things will change”

That characterisation clashed with the tone of the music majors that pointed to the global success of a new generation of successful British musicians that have blossomed in the streaming era. 

Geoff Taylor, head of the music trade body the BPI, which represents groups including Universal Music and Warner Music, has argued that the success of an industry contributing £1.5bn to the British economy has been driven by the investment of music labels. 

“Streaming is enabling more artists than ever, from all genres, to earn a long-term income: more than 2,000 artists will achieve 10m streams this year in the UK alone, double the number who sold the equivalent number of CDs and downloads in 2007,” he said. 

Yet others were quick to argue that it was illogical to argue that a shake-up of the market designed to pay artists more would damage the thriving sector.

Mercuriadis called the industry response “tone deaf” and said that labels needed to better share the wealth. “It’s like that old saying ‘what did you do in the war Dad?’ Did you make money with artists or at their expense?” he said. 

There is also division between independent musicians as to the benefits it will bring.

The most eye-catching recommendation by the DCMS is that songs streamed via playlists be treated not as if they were a CD sale but as if they were played on the radio. That tweak would drastically alter the way the money is split between record labels and the musicians, potentially hurting artists who opted to release their own music, some say.

Lauren Walker, who performs under the name Eurielle, said she felt the DCMS “has ridden roughshod” over her career given she has yet to recoup her personal investment in producing and releasing her music. She described a scenario where she would be forced to stop working with British orchestras and songwriters due to the potential shift as a “lose-lose” for artists in her situation.

One long-term manager of a number of independent musicians said another area of concern was the lack of data transparency when songs were streamed on platforms, such as how they were recommended and performed on playlists.

That made the formulation of successful legislation almost impossible, he argued. “Everyone is making wild assumptions about everything. No one has oversight over the algorithms. It’s all black box stuff,” he said. 

Should the proposals be enshrined through changes to copyright law or following action from the CMA, some may be in for a rude awakening. “[Labels] now have a method of making money in a vastly more aggressive way than they ever have before,” said Rodgers. “They’re drunk on it.”