zoom broken record

The #BrokenRecord campaign started by musician Tom Gray in the UK is gathering steam. Next Sunday (24 May) will see an online Tim’s Twitter Listening Party Festival allied to the campaign, which is calling for changes to the music streaming ecosystem that will benefit artists and songwriters.

Last Friday (15 May) Gray was one of the special guests on our weekly Music Ally TV Show, along with Deviate Digital CEO Sammy Andrews, who is also backing the campaign. You can watch the full show below (or here on YouTube) but we’ve also pulled out some of the highlights in this article.

YouTube video

Gray has been careful to steer the campaign away from targeting a single company or group of companies (Spotify or major labels, for example), but rather to focus on the key problems he sees with the system, and potential solutions.

In his introduction on the show, though, he spelled out a warning to the industry on why it should take the current unrest around streaming royalties seriously.

“This is Covid-19. Live [income] has gone, PRO money is going to dry up shortly. Whatever anger you think there is in the industry now towards streaming, imagine it in six months’ time when the last of the money that’s in touring musicians’ bank accounts has gone, and when their PRS and PPL cheques go through the floor,” said Gray.

“This has been problematic for such a long time, and that’s why I call it ‘Broken Record’ because there’s nothing new about this. I’m just saying basically the same things that you’ve heard a million times. But the context has completely changed.”

“The problem is that streaming always cannibalised culture and gave all of the income to a very small amount of the market. It always did that. It’s just now it’s deeply unhealthy. Now it’s dangerously unhealthy.”

Gray added that he prefers to see #BrokenRecord as a pressure group rather than a protest movement.

“It’s about saying collectively and as an industry we all recognise that this is problematic. We all recognise that this was never really right, and surely we’re all bright enough and dynamic enough and willing enough collectively to do something about it,” he said.

Gray has also been trying to make sure music fans receive this message, rather than just people who work in the music industry.

“It’s twofold. One is: your money doesn’t go to your music. And two, if your music is in any way niche or off the beaten track, it has been severely defunded by streaming. And we’re not doing anything about that. Streaming has been built by corporations for profit margins. It hasn’t been built with any sustainable cultural remit in mind,” he said.

Andrews offered a characteristically blunt summary of the current situation. “When we talk about the elephant in the room here, there’s a room full of them!” she said, backing Gray in his desire not to focus on a single ‘villain’.

“To point a finger at a particular streaming service is ridiculous. No stream is equal, no service is equal, no deal is equal, no rate is equal. But some of those things were set by people behind closed doors, some for large advances – for large amounts of money! – and equity… There’s so many parts to this equation,” she said.

Andrews pointed out that she is a long-time advocate for streaming, reminding the audience that it has returned the industry’s recorded music revenues to several years of healthy growth, after a decade-and-a-half decline. She also said that all the different companies, streaming services and major labels, will need to be part of any changes to the system.

“This conversation’s never going to move forward unless every stakeholder has it, and has it at the table,” she added, while warning that “we know there’s a million opinions on this, and we know also that it’s within a lot of people’s interests not to change things”.

The #BrokenRecord Festival
Sunday May 24th

Featuring:@BoyGeorge @TheShins@KTTunstall@johngrantmusic @WeArePins pic.twitter.com/wNqFEhq8tb

— Tim Burgess (@Tim_Burgess) May 11, 2020

There’s a theory that it’s more often artists who (like Gray’s band Gomez) signed record deals in the pre-streaming era who are most angry about streaming royalties, whereas newer artists who’ve built their careers entirely within that era – particularly the last few years – may feel happier navigating its economics.

Gray pushed back at that theory, talking about his efforts to sign up younger artists for the Tim’s Twitter Listening Party Festival.

“I went through about five, ten young acts who really wanted to, but were afraid of how the platforms would receive it if they were seen to be being critical of the situation. And were worried that they’d lose playlisting,” he said.

“Their managers in particular were very, very worried that if they didn’t have those relationships, or if it damaged those relationships in any way, their lottery ticket to possible income might disappear.”

“There’s dozens and dozens of young artists coming to me on Twitter every day going ‘I’ve got however many million plays, I have two hundred thousand monthly listeners, I do not make minimum wage’… There’s not enough money coming through to the artists in half of the label deals that are out there, however they’re being done.”

#BrokenRecord isn’t just about label deals. Another aspect concerns the split in on-demand streaming royalties between songs (compositions) and recordings – i.e. between publishers and labels.

“The song is massively undervalued. 13% [of streaming revenues] is a joke, considering that when someone listens to a piece of music, they’re probably there to hear the song,” suggested Gray.

“Songwriters were in deep trouble well before Covid. It’s ridiculous. And the only way they’ve managed to make money is by carving their way into the master right. So that’s become really common in America: they just go ‘Right, well we’re writing a song for you and you’re gonna give us five per cent of the master or ten per cent of the master, and that’s how we’re gonna work it out’. In Britain, unfortunately, that hasn’t become the norm.”

Gray sees the Covid-19 pandemic, and its impact on musicians, as a key moment to press for change on this and other issues.

“What are we trying to do with recorded music? The people who put the value in, are we going to try and extract that value and give it back to them? Or are we just going to say ‘Well, the winners are the winners and the losers and the losers’?” he said.

“If the view is ‘Oh, the ship sailed’. Well, okay, the ship sailed. Let’s go and talk to politicians, because they’re not going to like this mess. And if you guys can’t get your act together and figure this out amongst yourselves, maybe we do need to step in. Maybe the threat of statutory things – which nobody wants – is the threat that we all need to get our act together.”

Andrews called for a constructive approach, but expressed her concerns that persuading the different parts of the music industry to even get together to discuss potential changes, let alone to implement them, will be difficult.

“Everyone has known that this hasn’t worked for a while, but then we have to start looking at solutions, and I think that’s where this becomes so damning. Our industry can’t agree on anything!” she said.

“We’re arguing in the press about stuff they shouldn’t be arguing about in the press. We’re trying to speak to government leaders through Covid, and you’ve got a million trade groups going at each other in the tabloids. Well done everyone!”

“But this discussion requires that level of conversation. It requires the stakeholders to come to a table – I would prefer not out in public necessarily for those conversations – and go ‘right everyone, hands up if you stand to benefit or not from this situation’. I know I’m being idealistic and stupid, and I don’t care. I think it needs that level… we need to understand the crux of the problem.”

One long-running industry debate, about the potential for streaming royalties to be calculated using a ‘user-centric’ system rather than the current ‘pro-rata’ model (our recent explanation of all this is here) is also part of the #BrokenRecord conversation.

The demand is not just a demand for an immediate switch to a user-centric system across all the streaming services. It’s as much about calling for more (and more open) research studies into the model.

“I know for sure that tests have been run across independents and majors with real data sets to show what would come from user-centric streaming, and what would come from the existing system. I’d like to see that actually run for artists and for songwriters in the same way. If the labels are allowed to see what that looks like, why’s everyone else not allowed to?” said Andrews.

On the wider issue of artist and songwriter royalties, though, she suggested that there is the desire for change. “I’ve been private messaging a lot this week about this, and people both within the services, within the major labels, within the publishing houses, all think that this needs addressing. They just can’t say it publicly,” she said.

Research, not just on user-centric but on other potential changes to the system, is high on Gray’s agenda.

“We know where the systemic problems lie. We have to find solutions. If we’re going to be really simplistic about it, let’s create five solutions, game them all out. test them all. Research them to see how they play out. We have all the data, it’s not that hard to do,” he said.

“There are, I’m sure. lots of incredibly talented economists in the world who’d be very happy to do this for us if we gave them the job for the summer. It really isn’t that hard.”

Among those possible changes: “You could change it to licensing. The entirety of streaming could be a licence. There you go. It becomes a 50/50 artist/label straight down the middle. Bang. Deal with it. Next! What happens if you do that?” he said.

“What happens if you look at the way it’s distributed? What about it when the music is pushed out to you via a playlist or an algorithm? We know that that’s paid within Spotify contracts at a different rate to music that people choose. We all know that. So is that distribution or is that a different service? And if it’s a different service, should it be remunerated through the PROs? Should the PROs be saying ‘we think that money is ours’? Maybe they should!”

“The point is unless you look at these and properly inspect them and get the actual numbers up and make the effort, you’re never going to fix it!” added Gray.

How easy will it really be to get everyone – streaming services, labels, publishers, collecting societies and more – in a room in the first place?

“The biggest problem we’re going to have with this is the biggest companies that are doing it just answer to their shareholders. So how do we get them in the room? How is it in their interests to help us to sort this out, when they are only really answerable to their shareholders. And it’s a really complicated question,” he said.

One change that has been mooted, and which seems to be meeting the least resistance even from companies like Spotify, is raising the price of a standard streaming subscription from $9.99 a month.

Regular Music Ally TV Show guest Henriette Heimdal, market development coordinator for CD Baby, was also part of the show.

“Spotify tried it in Norway and it was successful. They maintained and even increased their subscriptions there,” she said – a point also touched on by CEO Daniel Ek during Spotify’s earnings call earlier this month.

“Unfortunately this shitstorm of Covid now hits, which has probably put a little bit of a dampener on any plans to increase subscription prices, because you are going to risk quite a lot of bad PR by increasing prices when the world’s going to go through a massive, massive recession,” said Heimdal. “Which is a shame. I absolutely think there was an appetite for it.”

She delivered her own warning: that a price rise for streaming subscriptions would need to come with a better argument about why this was well worth paying for.

“I don’t think personally that as an industry we’re very good at communicating the value of music to fans,” she said.

The conversation turned back to user-centric payouts, with anecdotal evidence suggesting that a lot of streaming listeners don’t realise this *isn’t* how the system works already.

“The reason that user-centric has been so useful in the conversation that I’ve been having with lots of different people, is that it gives people real insight into the fact that their money isn’t connected to the value that they assign to music. It just goes in and it disappears off. ‘Why doesn’t my money go to my music?’” said Gray.

“What we’re saying, all of us… Can we just agree on one thing, that it’s not right. Can we agree that there is a problem, and then look at all these solutions? User-centric needs more research. It needs funded, properly huge at scale [research].”

Heimdal agreed. “I wish there was a lot more data available. Public data, so that not just the execs can form their opinions about this, but [also] those of us who are going to be working in this industry for quite some time!” she said.

“If any of the major platforms was brave enough and could manage to work it with the major labels, to offer a different offering which gives more money to artists and writers, we would all move across to that platform the next day,” added Gray.

“If there’s a helluva selling point for a platform, it’s that you are about the music. They all try and pretend that they are, and then get themselves involved in legal disputes in other countries which make them look like they’re not.”

Andrews cut in. “Without naming names, every major streaming service that I’ve spoken to, off record, says that if it was proven that user-centric worked, they would move to it immediately. Because it doesn’t matter who they pay out. They pay the same money out regardless! That’s what everyone forgets in this.”

As the show started to wind to a close, the panel offered their ideas for practical first steps that can be taken now.

“We need a streaming summit,” said Gray. “With everybody represented in the room, with the knowledge that what we’ve got isn’t right.”

Heimdal: “I think we need to come together as an industry and be able to decide on a messaging towards the public. Coming back to the whole thing about the value of music, potentially increasing prices etc. I think we have a lot of work to do there: why that needs to happen and why we need to pay artists more.”

“Definitely both of those two things, and I would also want to see wide-scale research commissioning that is actually made available… I’m aware that there is data that exists that we’re not seeing,” said Andrews.

“In order for us as an industry to not look like a bunch of idiots, we need to make an informed decision from every stakeholder’s point… A conversation like Tom’s suggesting is the only way this works. And no, not everyone’s going to like every result, but can we do some give and take across several subjects, and make it palatable for everyone, and allow our artists to eat and pay their rent?”

Gray had the final say, answering a question about artist contracts from the pre-streaming era, and their impact on the current debate.

He claimed that major labels had not taken an opportunity a few years ago to follow some independents’ lead where the latter “got rid of unrecouped debts and got rid of breakage” clauses in existing contracts, in order to increase the streaming royalties for catalogue artists.

“With catalogue, if you wanted to free it up, if you wanted all of those artists to re-engage and get excited about selling their music in the streaming era, how do you do that? You take your boot of their neck, that’s how you do it. Then everyone would get excited about streaming!” he said, while stressing that this is not the crux of #BrokenRecord.

“I don’t make my money from streaming. I can’t make money from streaming because I’ve got a pre-2001 record contract. I make my money as a composer writing for theatre and film,” he said.

“One of the reasons why I feel so comfortable talking about this is because I’m only speaking out for my friends and colleagues. I’m not speaking out because I’m trying to liberate my rights from a silly contract that I signed when I was a child.”

Now read Music Ally’s recent ‘Spotify should pay musicians more? Let’s talk more about how‘ feature

Music Ally’s next Learn Live webinar will help you understand what’s required for artists to thrive in new international markets!

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Stuart Dredge

Music Ally's Head of Insight

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1 Comment

  1. Hi Tom,
    great to see someone taking a stand for music, Its pretty hopeless as a new songwriter or musician to get an income from the music.
    Contact me if you would like some support I will place some links on my website ,
    regards Bruce Kiwi Morgan

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