Important streaming reports launched
DCMS response to Select Committee
Two significant reports into streaming have been released. The first one is a response to the DCMS select committee report into streaming.
In their official response the Department for Digital, Culture, Media and Sport called the report a ‘key moment for the music industry‘.
When the select committee report was released the ISM welcomed its publication and called it ‘essential‘. We hoped that the report would work as the catalyst for action from the Government when it comes to streaming, particularly in ensuring fair remuneration for artists.
While the response did commit the Government to make a number of commitments, it stopped short of taking concrete action.
Summary of the main actions from Government;
- The Government is stablishing a music industry contact group with senior representatives from across the music industry. This group will convene this autumn and meet regularly over the next 12 months to drive action and examine stakeholder views on the key issues, including equitable remuneration, contract transparency, and platform liability rules introduced by the EU. This will complement separate ongoing work with industry to address broader welfare issues, such as bullying, harassment and discrimination, in the creative industries
- The Government is launching a research programme, alongside stakeholder engagement, in autumn 2021, with a progress update in spring 2022
- The Government is stablishing two technical stakeholder working groups during the autumn of 2021. The first will work to agree standards for contract transparency and establish a code of practice for the music sector, and the second will address data issues and develop minimum data standards for the industry. Both will be expected to update on progress after six months. We will also commission and publish an industry guide on data management in the music industry
- On copyright, the Government agreed that rightsholders should be properly remunerated for works used and shared online by user-generated content platforms such as YouTube and recognised difficulties rightsholders faced given the complexity of licensing negotiations. The Response notes that Government will consider what lessons can be learnt from EU member states on the Copyright Directive to improve the position of rightsholders entering into licensing negotiations with user-generated content platforms
We welcome Government's commitment to convening industry working groups, and we will be urging it to consult widely with the sector to address streaming.
IPO's ‘Music creators’ earnings in the digital era’
The following day the IPO’s report, ‘Music creators’ earnings in the digital era’ was released.
The report has been described as ‘ground-breaking’ by the Government and it aims to investigate the issues impacting upon the ability of creators to earn money since the development of music streaming.
It has long been the case that there has been a lack of publicly available evidence regarding streaming rights and royalties. The IPO’s research brings some clarity to a complicated area and should inform the thinking of Government and decision makers in the industry.
Some key findings:
- The revenue that featured artists and studio producers receive has declined markedly. In 2000, they gained approximately £205m from physical sales (£348m in 2019 terms) compared to 2019, their revenue from physical sales, downloading and on-demand streaming equalled £205m, representing a 41% decline in revenue in real terms
- In the same period, there was a 51% decline in record company revenues for these sources of approximately £1,360m in 2000 to approximately £670m in 2019 (figures adjusted for inflation)
- The revenue that composers and lyricists receive has declined, from physical sales amounted to £110m in 2000 (£187m in 2019 terms) to £150m from physical sales, downloading and on-demand streaming in 2019, a 20% decline on the inflation-adjusted 2000 figure. In the same period, music publisher revenues for these sources declined from inflation-adjusted figures of approximately £60m in 2000 to approximately £50m in 2019 (a 17% decline)
- Average per-stream rates for the years 2012-2019 have fallen, but revenues have risen. The average per-stream revenue is stable at around £0.011 (just over a penny). Around £0.006 (just over half a penny) per stream goes to recording rights-holders, and around £0.002 (around a fifth of a penny) per stream goes to music publishing rights-holders, with around £0.004 retained by the DSPs
The ISM believes that the report highlights the need for action to ensure that musicians earn more from their work.