Music streaming services have colonized society. Gone are the hits on physical discs for artists around the world that performed not so long ago. However, behind the new streaming strategies lie music royalties or royalties that performances pay to artists and their record companies for listening on their platforms. It’s a topic that is on the table every month and many artists say they should charge more for their music. A UK government proposal aims to increase royalties to artists and platforms such as Apple Music shows its perplexity and caution in this regard.
Changes in music royalties, following UK report
The UK government has a Department for Culture, Media and Sport headed by Nicky Morgan. On the proposal of this ministry, a Committee was created which is responsible for studying various aspects of the ministry in order to legislate in favor of the people that this ministry represents. One of the projects that the Committee introduced in October 2020 was the the economic impact of current streaming.
Examine the economic impact of music streaming on artists, record labels and the sustainability of the music industry in general.
The document released by the committee and sent by the UK government shows that current music streaming generates over a billion pounds per year with over 115 billion views per year. However, and here is the key, artists only receive 13% of the income generated.
The chairman of the committee assured:
While streaming has brought significant gains to the recorded music industry, the talent behind it – performers, songwriters and songwriters – is losing. [dinero]. It will only be enough of a complete restart of the transmission which enshrines in the law their rights to a fair share of the profits ”.
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Apple Music: “It’s a narrow margin business”
The study conducted by the Committee brought together the realities of record companies, artists, politicians and important figures in music streaming services. In order to deepen the importance of the problem have succeeded in proposing strategies that would resolve the negative impact of low music royalties on artists.
In one of the interventions, Apple Music was allowed to comment. It was Elena Segal, director of music publishing at Apple, who shed light on the subject in the ranks of the Big Apple:
We compete with the free. We have been competing with free, whether legitimate or illegitimate, since the beginning of iTunes… and competing with free is always very difficult because consumers have the option of going for free… I don’t think a ad-supported service can generate enough revenue to support a healthy overall ecosystem.
Apple and other big companies make sure that the music royalty business of music streaming services has a narrow margin. Especially when you consider that a lot of the money stays with the record companies and little reaches the artists. In fact, according to the latest statistics released by The Trichordist, Apple Music is one of the highest paying services for artists, accounting for 25% of all streaming revenue for just 6% of consumption.
Solutions for the future … without much intention to change
Finally, the Committee concluded that to improve music royalties for artists, they need to change some aspects intrinsic that music services have at their heart. These solutions are based on five main blocks:
- Fair remuneration
- Income parity for songwriters
- Conducted a study on market power in the music industry
- Fair and transparent algorithms and playlists
- Respond to concerns regarding government protection of the artist
We will see how important these thoughts are on the part of the UK government. In fact, throughout the committee’s interventions, allusions were made urging the United States and Europe to take the issue in their territories.