Frances Moore, the chief executive of the IFPI, has posted a blog about artist payments from streaming services. She opens by saying that artists are right when they claim they are seeing less money in royalty payments than they did a decade ago. “[B]ut,” she says, “it needs to be placed in the context of a decline in the value of the recorded music industry of more than one-third over that period.” She goes on to say that the organisation has conducted some research into the area (and points out that it was independently verified by BDO LLP) to try and bring more clarity to the debate.
She says that the results reveal that record producers, while moving to rebuild their businesses to be match fit for the digital age, “have actually safeguarded artists’ incomes as best they can”. Critics of label payments to artists can now play their Mandy Rice-Davies Card (i.e. “Well, she would say that, wouldn’t she?”).
Moore adds, “IFPI found that while payments to artists have declined over the past five years, the decline was substantially smaller than the reduction in corresponding sales revenue. This means that artist remuneration has actually increased as a proportion of record companies’ revenues in the last five years.”
In terms of the methodology underpinning this IFPI research, Moore explains that it was based on payments to locally signed artists in 18 different markets. Within this, it reports that industry revenue in those markets slipped 17% between 2009 and 2014 but that payments to artists in the same time period slid by just 6%. “The issue is not that artists are getting lower royalty payments from digital services – they are not – but that the overall recorded music market has shrunk, which means smaller revenues for all involved,” writes Moore.
The blog goes on to applaud labels as the “primary investors” in artists and singles out Sweden as a portent of the golden times that artists in other markets could enjoy in the (near) future. “In Sweden, where paid subscription predominates, local artists have seen payments increase by 111 per cent while corresponding record producers’ income increased by 47 per cent. A revived market is seeing payment to artists increase in absolute terms.”
Moore also windmills into SoundCloud and YouTube specifically as being the real villains of the piece here, shortchanging artists and labels by “taking advantage of exemptions from copyright laws that simply should not apply to them”.
The timing of this blog is interesting as it comes off the back of the recent Berklee/Rethink Music report that said that transparency (or, more specifically, the lack of it) is the biggest issue gripping (or, more specifically, strangling) the digital music business. The IFPI, of course, published its own direct rebuttal to this report soon after its publication, claiming it “contains too much inaccurate information, unsubstantiated assertions, and consequently unfair criticisms of record companies”.
Within all this, however, are hugely complex and controversial debates about digital accounting around label payments to artists. How organisations like FAC and the MMF will choose to respond to this IFPI blog (as well as how SoundCloud and YouTube will respond to Moore’s j’accuse moment) will be very interesting indeed.