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Can the UK music industry solve its crisis of trust? (Guest post)


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This guest column is by Andy Heath CBE, director of Beggars Group and co-founder of UK Music. In it, he draws from his deep personal experience in the music industry to address how a “crisis of trust” has taken over the UK industry. He outlines his ideas that labels and streaming platforms can implement to improve trust, increase transparency, and initiate better pay – including industry-wide reconsideration of how royalty payments are paid –  resulting in fruitful collaboration and innovation to benefit everyone in the space. 

 

In my early twenties, I was closely involved with the wave of British music that came to dominate the world. I was directly involved with The Faces, Rod Stewart, Status Quo and many other artists that sold millions of albums in the ensuing decades. We celebrated massively on the day that Rod Stewart achieved the unprecedented No1 in the singles and album charts on both sides of the Atlantic. 

The creation and promotion of the music was a constructive collaboration between all the actors, composers, artists, managers, record companies, publishers, agents etc etc. There were, of course, the usual competitive dynamics and sometimes robust disagreements. However, there was an industry-wide recognition that we were all in this together, interdependent on one another. The success of one would reflect on the success of all and included bonds of trust, friendship and real partnership. 

Since then I have witnessed British music transform a market that was completely dominated by the US – to become the second-largest exporter of music in the world and a jewel in the crown of British soft power.

Andy Heath CBE

However, last year, with trust at an all-time low, the industry’s commercial tensions were laid bare before a DCMS Select Committee inquiry into the economics of music streaming; characterised by acrimony and polarisation between artists and record labels, especially the majors – never the most popular section of the industry. 

This polarisation is reflected in wider society as a result of the digital revolution and amplified by the strains on everyone from the pandemic.

The Committee’s report called for a ‘total reset’ of contractual arrangements and greater transparency around streaming deals and royalty payments. It also called for an investigation by the Competition and Markets Authority (CMA) into the dominance of streaming platforms and major labels. The UK government has now corralled music’s warring parties into working groups to decide what that ‘great reset’ should entail.

 

Fairness, transparency and better pay

The themes under discussion in music are fairness, transparency, rights and better pay for artists and songwriters. Despite the flaws in the committee’s work I am pro-reset. I believe things can and should be better. 

Clearly the park footballer on a Sunday afternoon is no more likely to emulate the earnings of a Harry Kane than a decent music creator match the income of Ed Sheeran.  

But new creators starting out today have to compete for an audience not just with today’s Premier League players, but with every song ever written, including the Beatles, Stones and Dolly Parton – imagine that? 

And with 60,000 new tracks uploaded to Spotify every day – while the price of a subscription stays the same – each artist’s share of the available pot of royalties is fractional and gets thinner every day. The result is that the rewards available for minority genres are so minimal as to make it appear virtually impossible to make a living. The fact  that streaming income is earned over years – not as a one-off, front-loaded hit like it was with CD sales – amplifies this, as does the current lack of touring income.

Increasingly the blame for this situation is being laid at the feet of the major labels – even though statistically more artists are better off than has ever been the case before. 

The elephant in the room – and what can be done about it

To address this, it is important that a way is found to return the British music market to a bold, innovative, adventurous and creative mindset that brings far greater satisfaction to the audience, the creators and the industry.  We have to get past this crisis of trust.

How do we do that ?

Transparency is key: record companies must be more open about royalty flows, and tech companies must be more open about the opaque algorithms that determine promotion and recommended tracks. 

Price is the proverbial elephant in the room – the music industry ceded control over commercial rates and terms to support the development of legitimate streaming services and to quash piracy.  Two decades later, consumer prices for streaming subscriptions have remained flat, effectively reducing in real terms by circa 20%. It’s a sign of a stagnated market.

The industry must reclaim and reassert the exclusive rights underpinning this jewel of UK’s culture, which enable music copyright owners to decide whether or not to sell their property online (as streams or otherwise) and on which commercial terms – and the artist community should be mindful that any erosion of those rights would remove the last bastion of protection, and leave them at the mercy of tech giants.   

“Record labels must update some of their business practices to reflect the current market.”

Equally, record labels must update some of their business practices to reflect the current market. It is abundantly clear that to pay an artist the royalty rate which applied 25 years ago is manifestly unfair. Record companies are expected to continue to invest in new and innovative creators and that is impossible without the revenue from older music – but, as Beggars and others have shown, those two imperatives can be reconciled.

The single most effective action that should be taken is for all royalties to be reviewed and paid through to legacy artists at a level that is the norm now and not 25-40 years ago.

If we can do these things, perhaps we can get back to trust, friendship and real partnership – and return to a world where, as before, six or seven out of ten tracks sold in the world will be coming from this country.

Some further reading: this piece follows a recent guest column by David Martin of the Featured Artists Coalition, which also focused on the topic of industry trust.


Written by: Music Ally