Music industry reacts to UK streaming economics inquiry report

The UK parliament’s Digital, Culture, Media and Sport (DCMS) committee published its report on the economics of music streaming early this morning. You can read our analysis of its key recommendations and what they mean for the music industry here. Or, if you prefer to listen, we’ve discussed it all in the latest episode of our Music Ally Focus podcast.

The industry has also been responding to the report. Well, parts of the industry: representative bodies are shouldering the work of publicly commenting on it, rather than individual rightsholders. Meanwhile, the streaming services themselves are staying out of the public fray for now, perhaps relieved that they were not the main target for criticism in the report.

So who’s saying what? We’re gathering responses here, and will update this post as more come in.

The DCMS Committee

We’ll start with the committee itself. “While streaming has brought significant profits to the recorded music industry, the talent behind it – performers, songwriters and composers – are losing out. Only a complete reset of streaming that enshrines in law their rights to a fair share of the earnings will do,” said its chair Julian Knight MP.

“However, the issues we’ve examined reflect much deeper and more fundamental problems within the structuring of the recorded music industry itself.”

“We have real concerns about the way the market is operating, with platforms like YouTube able to gain an unfair advantage over competitors and the independent music sector struggling to compete against the dominance of the major labels,” he continued.

“We’ve heard of witnesses being afraid to speak out in case they lose favour with record labels or streaming services. It’s time for the Government to order an investigation by the Competition and Markets Authority on the distortions and disparities we’ve uncovered.”

One of the committee members, Kevin Brennan MP, has been tweetstorming about the reports’ findings too:

Today the @CommonsDCMS Committee publishes its report into the economics of music streaming. Here’s a thread of the report’s findings and recommendations. (1/25) #BrokenRecord #FixStreaming pic.twitter.com/rdfhyMGdg2

— Kevin Brennan MP (@KevinBrennanMP) July 15, 2021

The BPI

Labels body the BPI published its own statement this morning from chief executive Geoff Taylor. “The UK’s global success in music is driven by label investment in new artists, creating music that is loved around the world and contributing more than £1.5 billion a year to the UK economy,” he said.

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

“When considering this report, the Government also needs to consider the vital role that labels play as the leading investors into artists’ careers, with investment in artists by record labels growing year-on-year. Artists also now have more choice in how to manage their careers, with independent and self-releasing artists growing their share of the market,” he continued.

“Labels are committed to ensuring that artists share fairly in the growth from streaming. We will carefully examine the findings of this report, but it is essential that any policy proposals avoid unintended consequences for investment into new talent, and do not imperil this country’s extraordinary global success in music.”

Broken Record

Musician Tom Gray founded the Broken Record campaign that sparked the inquiry, and he has also been sharing his response on Twitter this morning:

The @CommonsDCMS report is DAMNING.

It brilliantly takes each issue in turn and arrives at a conclusion on the balance of evidence.

In every single instance it reflects an industry that is pocketing a fortune while failing UK performers and songwriters.#BrokenRecord

— Tom Gray #BrokenRecord (@MrTomGray) July 15, 2021

Gray also issued a longer statement to journalists. “The report brilliant and coherently cuts to the chase: the music industry has a serious problem. Profits are soaring, margins are better than ever, the value of the once piracy-blighted industry is forecast to eclipse anything seen in our lifetimes within a decade, but performers and songwriters are being left well behind,” he said.

“As we’ve repeated, rather like a broken record, it’s a failing market where corporations have little incentive to share their extraordinary profits with the architects of their success, musicians.”

“This goes to show that when artists come together and speak honestly about our experiences and those of our peers, our politicians can easily surmise the reality – the public too. This is not about getting more money for wealthy musicians, that mythology ought to be long dead. This is about preserving a national treasure into the future: our extraordinary, diverse British musical talent.”

The Competition and Markets Authority

The report made several recommendations involving a referral to the UK’s competition watchdog, the CMA. It has commented this morning, albeit fairly carefully.

“The CMA strongly supports competitive digital markets. 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,” its spokesperson said.

AIM

Independent labels body AIM has put out a statement from its CEO Paul Pacifico. “The Select Committee has impressively zeroed-in on some of the key issues in music and many of the report’s findings endorse and vindicate the ethical practices of the independent music community,” he said.

“The independent community is founded on fair dealing and we believe the MPs have tried to make recommendations that benefit creators in good faith. However, our view is that equitable remuneration will not deliver the outcome they are hoping for.”

“It is a 20th century solution not fit for the 21st century digital market and will leave the next generation of artists worse off. We look forward to examining the findings in detail and continuing to work with all our partners in music and beyond to deliver successful, strong, inclusive and diverse outcomes for music.”

FAC / MMF

The Featured Artists Coalition and MMF have put out a joint statement, having also teamed up to submit evidence to the inquiry earlier this year.

“We welcome today’s landmark report from Parliament’s Digital, Culture, Media & Sport Committee calling for artists, composers and musicians to benefit more equally from the boom in online streaming,” they said.

“This is a serious and comprehensive piece of work. It contains a wide range of recommendations, many of which, if implemented, could fundamentally reset and improve the current economic model for recorded music. It demands quite clearly that those companies and corporations regarded historically as ‘rights holders’ must urgently modernise their business practices, and go further and faster in their pace of reform.”

The statement continues: “Beneath the headlines, we are especially pleased the Committee has recommended tackling many long-running market dysfunctions – for instance, that legacy recording deals are overhauled, that artists can recapture their rights, and that inefficiencies and inequalities around songwriter “royalty chains” and “black box” allocations are challenged. These issues should be low-hanging fruit. Addressing them now would have a transformative and material impact on the livelihoods of all artists, songwriters, performers and producers.”

And it concludes: “More broadly, we welcome the idea of a market-wide investigation by the Competition & Markets Authority and, going forward, we urge the Government to ensure there is a robust, transparent and evidence-led response to this report that involves all voices in our industry – including young and emerging artists who have grown up in a streaming environment.”

“This is a once in a lifetime moment to reset our business along fairer and more equitable lines, it is not an opportunity to be wasted.”

Musicians’ Union and the Ivors Academy

The Musicians’ Union and the Ivors Academy have also been working together throughout the inquiry, and their heads offered statements this morning.

“As we all emerge from the horrors of the pandemic, the Government’s levelling up agenda is more important than ever. Our industry has been on its knees and if we want to preserve our cultural heritage, bring opportunity to all four corners of the UK and keep musical talent in Britain, we’ve got to fix streaming and stop exporting millions of pounds to huge record labels and their owners overseas,” said MU general secretary Horace Trubridge.

“This cross-party report is revolutionary. It grasps the issue, identifies the problems and recommends achievable and practical solutions, which won’t cost the taxpayer a penny.”

“It’s time to make the most of this rare, cross-party consensus, bring British copyright law up to date, show Global Britain leading the fight to protect the intellectual property of artists and creators, and make the UK the best place to be a musician.”

Ivors Academy chair Crispin Hunt also welcomed the report.

“Today is a great day for musicians and music creators. This cross-party report gives the Government the firepower and political mandate it needs to secure the commercial, professional and artistic futures of many thousands of British music creators, and to keep their value here in Britain,” said Hunt.

“For too long, foreign owned major record labels have recklessly gambled with the UK music economy and the future of British music. The true innovators and creators are our musicians and composers, and by acting on the Committee’s thoughtful recommendations, the Government will do so much good for so many – musicians and listeners alike.”

Impala

European independent labels body Impala isn’t so keen on some of the report’s findings, but welcomes others, as its executive chair Helen Smith explained.

“The DCMS report touches upon very important questions surrounding the music market as a whole, and it is crucial to look at different options. There are many opportunities to make streaming fairer for all, and we see music services and streaming platforms as our key partners for doing so,” she said.

“They are a vital part of today’s music market and we look forward to working with them and the whole ecosystem to improve the situation for musicians, labels, and of course, fans.”

“We support reform of streaming and we recently set out concrete ways of doing that in our 10-point plan to make streaming fairer. IMPALA cannot support equitable remuneration on streaming as we believe it is not in fact equitable. Our assessment is that it would be damaging for diversity and emerging artists,” continued Smith.

“We look forward to seeing the options proposed by IMPALA and others in the independent community assessed as part of any next steps and we urge decision makers to look carefully at how risk works in the ecosystem and the evolution of remuneration in each section of the music community.”

Hipgnosis

Hipgnosis Songs Fund is one of the first music companies (as opposed to industry bodies) to put out a response statement.

“This is an impressive report from the DCMS Committee. In a short space of time our members of parliament have been able to distil why the songwriter and artist are not being remunerated properly with some accuracy and we both applaud and support their efforts,” said founder Merck Mercuriadis.

“We are particularly focused on their recommendations that there be a full reset of streaming in law that gives songwriters and artists a fair share of the earnings, and that further to this the Government refer the case to the Competition and Markets Authority to undertake a full market study into the economic impact of the major music groups’ dominance.”

“This is essential to ensure that the unhealthy control that the major recorded music companies have over streaming negotiations is addressed and to expose the fundamental flaws that exist within the music industry. Our wish is that this will lead to songwriters being paid fairly and equitably and in a manner that recognises that without the song we have no music industry.”

He concluded: Ultimately if we are to make streaming truly fair for songwriters and artists it is critical that they are given a direct seat at the negotiating table, have exclusive rights, not merely a right to remuneration, and are paid in line with the share taken by record labels.”