MPs to examine the economic impact of streaming on the music industry

The Digital, Culture, Media and Sport Committee will begin their inquiry next month

MPs are set to examine the economic impact that music streaming is having on artists, record labels and the wider music industry.

The Digital, Culture, Media and Sport Committee are looking into the issue, with the first evidence session for the ‘Economics of music streaming’ inquiry expected to be held at the end of November.

The Committee will look at “the business models” operated by such streaming giants as Spotify, Apple Music, Amazon Music and Google Play. Over £1 billion in revenue was generated from 114 billion music streams in the UK last year, with the inquiry noting, however, that “artists can be paid as little as 13% of the income generated”.

Advertisement

“The Committee will also consider whether the government should be taking action to protect the industry from piracy in the wake of steps taken by the EU on copyright and intellectual property rights,” a UK Parliament statement adds.

As well as gathering the perspectives of industry experts, artists, record labels and the streaming platforms themselves, the committee is also inviting written submissions which address the following questions:

  • What are the dominant business models of platforms that offer music streaming as a service?
  • Have new features associated with streaming platforms, such as algorithmic curation of music or company playlists, influenced consumer habits, tastes, etc?
  • What has been the economic impact and long-term implications of streaming on the music industry, including for artists, record labels, record shops, etc?
  • How can the Government protect the industry from knock-on effects, such as increased piracy of music? Does the UK need an equivalent of the Copyright Directive?
  • Do alternative business models exist? How can policy favour more equitable business models?

These written submissions must be submitted before 6pm on November 16.

Spotify, Apple Music, Deezer
Spotify, Apple Music, and Deezer apps CREDIT: Chesnot/Getty Images

“While streaming is a growing and important part of the music industry contributing billions to global wealth, its success cannot come at the expense of talented and lesser-known artists,” DCMS Committee Chair Julian Knight MP said.

“Algorithms might benefit platforms in maximising income from streaming but they are a blunt tool to operate in a creative industry with emerging talent risking failing the first hurdle.

Advertisement

“We’re asking whether the business models used by major streaming platforms are fair to the writers and performers who provide the material. Longer-term we’re looking at whether the economics of streaming could in future limit the range of artists and music that we’re all able to enjoy today.”

Both the Musicians’ Union and The Ivors Academy have welcomed the news, with the former’s Deputy General Secretary Naomi Pohl saying that the inquiry comes “at a time when musicians are making very little money from live performance due to Covid-19”.

“The Musicians’ Union and the Ivors Academy have been calling for a Government review because the current crisis has highlighted that the royalties generated by streaming are far too low and the market is failing the vast majority of our members,” she said.

“We hope this inquiry will show that a more equitable model is possible and that streaming royalties can and should play a significant role in sustaining the careers of creators and artists.”

Graham Davies, Chief Executive of the Ivors Academy, added: “On behalf of all music creators we are delighted that Government will investigate the streaming market so it can work for all parts of the music industry. Most creators cannot make a living from streaming, it simply does not pay enough and millions of pounds each year is not properly allocated due to poor data.

“Following our campaigning with the Musicians’ Union, performers and creators to Fix Streaming this is an opportunity to create a transparent, fair and equitable approach.”

Earlier this week, a YouGov poll of music fans found that 77% of respondents believe that artists deserve a greater share of revenue from streaming services.

Advertisement
Advertisement
Advertisement