You can probably divide music artists into two categories – those who are business savvy and those who are not. The business savvy ones are very aware of what’s in their their contracts and keep track of the latest music business trends. The others tend to read the headlines but misinterpret the kernel of truth in the online articles they read. As a result you get a letter that UK artists sent to Prime Minister Boris Johnson asking for streaming royalty reform – sort of.
The bottom line of the letter is that the artists and songwriters want a larger share of streaming royalties than what they’re currently receiving. While that sentiment is completely understandable, I must admit I scratched my head somewhat after reading and re-reading the letter, which you can see below:
The Letter
“Dear Prime Minister,
We write to you on behalf of today’s generation of artists, musicians and songwriters here in the UK.
For too long, streaming platforms, record labels and other internet giants have exploited performers and creators without rewarding them fairly. We must put the value of music back where it belongs – in the hands of music makers.
Streaming is quickly replacing radio as our main means of music communication. However, the law has not kept up with the pace of technological change and, as a result, performers and songwriters do not enjoy the same protections as they do in radio.
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Today’s musicians receive very little income from their performances – most featured artists receive tiny fractions of a US cent per stream and session musicians receive nothing at all.
To remedy this, only two words need to change in the 1988 Copyright, Designs and Patents Act. This will modernise the law so that today’s performers receive a share of revenues, just like they enjoy in radio. It won’t cost the taxpayer a penny but will put more money in the pockets of UK taxpayers and raise revenues for public services like the NHS.
There is evidence of multinational corporations wielding extraordinary power and songwriters struggling as a result. An immediate government referral to the Competition and Markets Authority is the first step to address this. Songwriters earn 50% of radio revenues, but only 15% in streaming. We believe that in a truly free market the song will achieve greater value.
Ultimately though, we need a regulator to ensure the lawful and fair treatment of music makers. The UK has a proud history of protecting its producers, entrepreneurs and inventors. We believe British creators deserve the same protections as other industries whose work is devalued when exploited as a loss-leader.
By addressing these problems, we will make the UK the best place in the world to be a musician or a songwriter, allow recording studios and the UK session scene to thrive once again, strengthen our world leading cultural sector, allow the market for recorded music to flourish for listeners and creators, and unearth a new generation of talent.
We urge you to take these forward and ensure the music industry is part of your levelling-up agenda as we kickstart the post-Covid economic recovery.”
This was signed by 150 artists including Sir Paul McCartney, Coldplay’s Chris Martin, The Who’s Roger Daltry, Brian Eno, Peter Gabriel, among other music celebs.
To What End?
I don’t want to sound like an apologist for the music industrial complex, but I’m not sure this letter was thought through very well. On the surface it looks like a plea to change the UK’s 1988 Copyright, Designs and Patents Act so that songwriters can get paid more in line with what they get for radio. Fair enough, but as you read further you begin to think, “Is this about songwriting royalties or artist performance royalties?” which are two completely different things.
The letter states, “Today’s musicians receive very little income from their performances – most featured artists receive tiny fractions of a US cent per stream and session musicians receive nothing at all. To remedy this, only two words need to change in the 1988 Copyright, Designs and Patents Act.”
The first sentence is somewhat deceiving. It infers that artists don’t make any money at all from streaming when major A-list artists (like the ones that signed this letter) actually make a great deal, especially the younger ones who are hot on the charts now. While it’s true that they make fractions of a cent per stream, just add a couple hundred million of them up and see what you get.
Then the second sentence talks about the two words that need to change in the law – for the life of me I can’t find the two words they’re referring to. It would have been nice to outline that.
There’s no need to continue to deconstruct a letter that had obvious good intentions. This was looking out more for artists not on the same A-list tier as the signees (at least I think it was). But I have to say that it seems misguided.
A Solution
One obvious solution is to sign more artist-friendly deals with record labels and music publishers if you want a bigger piece of the pie. It’s these middlemen who are sucking the royalties dry thanks to agreements that worked in the music business of the past, but not so much now.
To my knowledge, no independent streaming network is actually profitable yet (Amazon AMZN and Apple AAPL use their music services as a loss-leader). Yes, you can make a case that Spotify is using its margins inefficiently with high-priced offices and executive salaries, but even fixing that would hardly provide the increase in royalties that many artists (especially older ones) would like to see.
Another point is that Spotify and every other streaming service is limited in what they can do by the licensing agreements that they sign with the major labels. And in the case of Spotify, they’re shareholders too. If you’re looking for a villain in this, there you go.
Case in point here, you hardly ever hear younger artists complain about royalties, since at least the A and B list ones are doing sufficiently well financially, and they have no reference point in the physical music world of old to refer to. You don’t miss what you never had, so got streams = got money.
The problem is that most older artists have long ago made their deal with the devil, and there’s no turning back now. A hollow plea for the government to help will not turn back royalty time.