ISM welcomes 'essential' DCMS Select Committee report on streaming Jump to main content

ISM welcomes 'essential' DCMS Select Committee report on streaming

Today the DCMS Select Committee released its long-awaited reporting into streaming. Many of the report’s recommendations aim to address the industry’s power imbalance which is weighted against musicians. The ISM is particularly pleased that the report calls for fair remuneration, an issue we have long campaigned on.

The coronavirus pandemic has exposed the inadequacies of the current economic model for the musicians that create and perform the music we stream. Although streaming has become mainstream in recent years, the amount of money reaching musicians is often pitifully low, leaving the vast majority of musicians reliant on generating the bulk of their income from live performance.

Whilst streaming has helped people listen to more music than ever before, the confidentiality clauses contained in the commercial agreements between streaming services and rightsholders leaves artists, composers and songwriters in the dark as to the terms of the deal. This lack of transparency makes it virtually impossible for artists, composers and songwriters to know whether they are receiving the correct amount of royalties.

The Select Committee report calls for a ‘complete reset’ of music streaming. When publishing the report Chair of the DCMS Committee Julian Knight MP said:

“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. 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. 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.”

Report recommendations

The Select Committee recommend a broad range of legislation reforms and regulation changes to deal with the issues covered in the report. The top recommendations include:

1. Equitable remuneration

The right to equitable remuneration is a simple yet effective solution to the problems caused by poor pay from music streaming. It is a right that is already established within UK law and has been applied to streaming elsewhere in the world.

The Government should enact legislation so performers can enjoy the right to equitable remuneration for streaming income.

2. Revenue parity for songwriters and composers

Despite being an important part in the music creation and music streaming process, songwriters and composers are not effectively remunerated for their work.

The Government should work with creators and the independent publishing sector to explore ways in which new and upcoming songwriters and composers can be supported to have sustainable careers and independent music publishers remain commercially viable.

3. A study into market power in the music industry

There is no doubt that the major music groups currently dominate the music industry, both in terms of overall market share in recording and (to a lesser extent) in publishing, but also through their ownership of the most valuable music rights and through mergers and acquisitions of competing services.

The Committee recommends that the Government refer a case to the Competition and Markets Authority (CMA), to undertake a full market study into the economic impact of the majors' dominance. The Government must also provide the CMA with the resources and staffing to undertake this case.

4. Fair and transparent algorithms and playlisting

Music curators play an important role in the discovery and consumption of digital music. It's unsurprising that music creators are putting more resources into catching the eye of these curators.

Where curators are paid or receive benefits in kind for playlisting, we recommend that they are subject to a code of practice developed by the Advertising Standards Authority (similar to social media influencers) to ensure that the decisions they make are transparent and ethical.

5. Address concerns about safe harbour

To ensure that music creators and companies prosper in the globally important UK music market, the Government must provide protections for rightsholders that are at least as strong as those provided in other jurisdictions.

As a priority, the Government should introduce robust and legally enforceable obligations to normalise licensing arrangements for User Generated Content hosting services, to address the market distortions and the music streaming 'value gap'.

DCMS Select Committee member, Kevin Brennan has also usefully summarised the report's findings and recommendations.

Responding to the Select Committee's report, ISM Chief Executive Deborah Annetts said:

'This report makes for essential reading in the music industry and now our sector needs the Government to look closely at its recommendations and make changes to support them. For too long creators have been without their fair share. A sustainable music industry must have fair remuneration at its heart and our members will be delighted to know that they are gaining support in Westminster, which our inquiry submission called for.

The committee has investigated all parts of the complicated music ecosystem and while there are no quick fixes, the report highlights that too often the cards are stacked against the creator, which is an imbalance that needs addressing. We thank the Committee for its comprehensive work in producing this report, it is an important first step which will hopefully improve the situation for musicians.'

As founder members of the Fair Terms for Creators Campaign, the ISM is committed to working with industry stakeholders to find an equitable, sustainable and transparent model for the licensing and distribution of royalties that is suitable for the streaming era.