BUSINESS
Is there a fairer way for streamers to pay artists? been saved does not work for everyone,” the report concludes. “The issues ostensibly created by streaming simply reflect more fundamental, structural problems within the recorded music industry. Streaming needs a complete reset.” The UK’s competition regulator is now preparing to carry out a market study focused on the music industry, including exploring how artists are paid, and whether improvements could be made. One model that might help is “user-centric” payouts, where the royalties from each individual streaming subscriber are divided only between the music they listen to, rather than the current pro-rata system where the royalties go into a bigger pool divided by overall share of streams on a service. SoundCloud is testing the model, calling it “fan-powered royalties”, and recently claimed that a new track released by British band Portishead “earned more than six times the revenue it would have under a pro-rata model” in a month. The company will be discussing its work with artists, including fan-powered royalties, during its two sessions at Midem Digital Edition 2021. A study published by the National Music Centre (CNM) in France in January 2021, using data from Spotify and Deezer, suggested that user-centric payouts would redistribute royalties away from the top artists and towards those lower down the industry hierarchy, including musicians in genres like classical music, jazz, metal and blues. The redistribution would not drastically change the fortunes of those artists, but streaming services have indicated a willingness to explore the model further, if music rightsholders agree to pursue it. “While initial research around a user-centric payment model is limited and doesn’t show the dramatic shift many thought it might, if artists and songwriters prefer this model, we support conducting additional research and will keep an open mind,” Spotify’s spokesperson said when the CNM study was published. Meanwhile, French streaming and download service Qobuz is aiming to protect artists remuneration and sound quality in the online environment. Qobuz offers both high-resolution streaming and the opportunity to buy high-resolution music downloads from its online store. “Since its creation in 2007, we advocate for quality music that respects artists and their work; music that allows for a fair remuneration of artists and rights holders,” Qobuz deputy CEO Georges Fornay says. “Thus, Qobuz does not offer a free formula, does not impose any advertising and calls for a preference for high-resolution streaming subscriptions and download purchases, two models that ensure better remuneration for all those involved in musical creation.” User-centric payouts may well come up for discussion during Midem Digital Edition 2021, as the industry continues to consider how the streaming economy can evolve in the next decade of growth. n
Fair pay for artists in the streaming environment will be a hot topic during Midem Digital Edition. Stuart Dredge examines some of the issues around royalties and the digital environment
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TREAMING has returned the recorded music industry to growth. According to the IFPI, global revenues grew by 7.4% in 2020 to $21.6bn: the sixth consecutive year of growth, despite the challenges of the COVID-19 pandemic. The streaming boom has helped Spotify to become a company with 381 million listeners and a market cap of more than $50bn. Universal Music and Warner Music have joined it as public companies, with market caps — as of the start of November 2021 — of $53bn and $25.5bn respectively. Publishers’ revenues are climbing, and there is a boom in acquisitions of publishing and recordings catalogues by companies like Primary Wave, Hipgnosis Songs Fund and Round Hill Music, as well as the entry into the rights-buying market of wealthy investment firms like KKR and Blackstone. However, these boom times have also revealed tensions within the music industry, particularly over how streaming revenues are shared with artists and songwriters. In the UK, those tensions sparked a parliamentary inquiry whose report called for significant changes in the music streaming economy. “Streaming has undoubtedly helped save the music industry following two decades of digital piracy but it is clear that what has MIDEM DIGITAL EDITION NEWS
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