November 8, 2017:Spotify, Deezer and SoundCloud launch European lobbying coalition

Music-streaming services Spotify, Deezer and SoundCloud are among the founder members of a new coalition that plans to represent the European digital music industry in Brussels.

Streaming service Qobuz, B2B firm 7digital and music-analytics startup Soundcharts are the other three founding members of Digital Music Europe. Its president will be Deezer CEO Hans-Holger Albrecht, while its chairman will be Spotify’s director of EU regulatory affairs Olivia Regnier.

According to its launch announcement this morning, DME will “showcase and promote the success of the European digital music industry, it will serve as a resource for policy-makers, media and the digital music industry, and will advocate for policies that shape a favourable business environment for digital music”.

The DME expects to be lobbying around issues including copyright, geo-blocking, access to online platforms, e-privacy, data transfers, digital contracts and taxation, all of which are currently being tackled by European policy-makers.

“The EU has been extremely prolific in terms of legislation. It has a very ambitious program, and a lot of the initiatives concern us,” Regnier told Music Ally in an interview ahead of the announcement. ‘Concern’ in this context meaning ‘are relevant to’ rather than ‘worry’, it should be noted.

“The EU is working on the completion of the digital single market, and a number of resolutions are on the table. Geo-blocking is close to completion, and it is important for us that music is not included in the geo-blocking regulation.”

“We also want to make sure that the rules of what is adopted on copyright continue to be positive for digital music services to operate in Europe. We have a number of issues coming up that are relevant to our sector.”

Regnier stressed that the DME intends to be open to smaller digital-music startups as well as larger streaming services, pointing to Soundcharts as an example of the kind of company that will be included.

“We want to represent the innovation and the diversity of our companies, and have a voice in Brussels to encourage policies that continue to sustain the development of the digital music business, and the music sector in general,” she said.

One of the elements of our alliance is to show that you have a large number of innovators in Europe: really a diversity of services. It’s very good to show that Europe has entrepreneurs, that we are successful, and that Europe is a key player in the digital economy, and in the economy of digital music.”

Among the issues on DME’s agenda, ‘access to online platforms’ jumps out as a hot topic. In May 2017, Deezer’s Albrecht and Spotify founders Daniel Ek and Martin Lorentzon were among the signatories of a letter to EC president Jean-Claude Juncker about this issue.

While it didn’t mention Apple, Google, Amazon or Facebook by name, it focused on “major online platforms – be they mobile operating systems, app stores, search engines, marketplaces or social media platforms” and their potential anticompetitive practices if they also have their own digital services (like music-streaming):

“Our collective experience is that where online platforms have a strong incentive to turn into gatekeepers because of their dual role, instead of maximising consumer welfare, they can and do abuse their privileged position and adopt B2B practices with adverse consequences for innovation and competition. These practices range from restricting access to data or interaction with consumers, biased ranking and search results to lack of clarity, imbalanced terms and conditions and preference of their own vertically-integrated services.”

In June, Albrecht addressed the issue in his keynote session at the Midem conference in Cannes.

“You see a tendency – this is my view – that those big players try to control where is the consumer going? Where is the user going? You can see they do it via hardware, obviously. They do it via software,” he said.

“They do it via the voice control nowadays, which we believe is a key idea to drive where the consumer is going via these control aspects. So if you go on Alexa for example, they don’t direct somebody who’s searching for Abba to Deezer for sure! They direct them to their own services.”

“So you see this kind of situation where you have those big giants, and they go into hardware, they go into software, they go into these functions that drive the consumer into the internet. And that’s a concern. And we have to discuss that openly with those players, and with Brussels as well, because that is the strength – or has been the strength – of the internet: it was a kind of free competition and fair competition.”

This week, Regnier – who joined Spotify in April after 20 years working for industry body the IFPI, so is no stranger to Brussels battles with big tech companies – played down the issue of platform access when asked by Music Ally.

The DME is not built with that in mind in particular. There are a much broader array of issues we want to look at. That may be one of them: it’s true that open-access platforms are important,” she said. “But also having a favourable copyright environment, a favourable data environment… That [platforms] is one issue, but it’s not the final goal.”

Even so, we wouldn’t be surprised to see the DME’s lobbying efforts locking horns with those of EDiMA, the trade association that represents Apple, Amazon, Google and Facebook in Europe, among other tech companies.

While those companies seemingly won’t be joining DME, who else will it be open to? There’s an argument to be made that many labels are essentially digital music businesses in 2017, while areas like production music (Audio Network and Epidemic Sound being two of the more digital European examples) could fall in to this territory as well.

“The focus of our alliance is more around the distribution of music online, and interaction with consumers online,” is how Regnier defined it. “Of course, there will be a number of areas where we work together with the music sector as a whole, including the labels. But for us the focus is the distribution of music to consumers.”

One view of the DME certainly could be that of plucky European innovators teaming up to ensure they get a level playing field to compete with the big American technology companies.

But there’s an alternative view that some artists and songwriters may take that’s less positive: that as a lobbying alliance for streaming services and other digital music companies, the DME may end up taking some positions that might be more negative for individual music creators. Copyright issues most obviously.

Regnier’s response when asked about this: “Artists have always been at the centre of Spotify. We’ve really committed to supporting artists, and to helping them make a living,” she said. “From that angle, we’ve seen that the development of music services means the whole music sector grows, and that rightsholders, producers and artists benefit from this.”

That doesn’t take away from the fact that DME will be directly representing the interests of its members, rather than musicians, and thus may sometimes find itself in conflict with the latter: witness the recent fury of US music publishers when Spotify seemed to be suggesting that it may not need to pay mechanical royalties, as one (admittedly non-European) example.

It will be interesting to see how the new alliance interacts with some of the other Brussels-focused bodies – Impala for independent labels, for example, or ECSA for songwriters and composers. For now, DME’s chairman is stressing the positive role she hopes the association can bring.

Europe is really innovative and has a really vibrant sector for music. For us, that’s definitely an opportunity to be heard, to be more active, and to show how entrepreneurial European businesses are,” she said.

“We feel that there is definitely a positive message we can bring to the decision-makers when they are looking at the digital single market. We feel we can definitely contribute, bring a positive story, and really be a voice in the developments.”

Stuart Dredge
READ MORE: Analysis News
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