Broken record: the future of music streaming and artists' remuneration

The draft Copyright (Rights and Remuneration of Musicians, Etc.) Bill – a Private Members' Bill sponsored by Kevin Brennan MP – was debated in the UK Parliament on 3 December 2021. The government ultimately rejected the Bill, which sought to introduce new laws to redress the power balance between musicians and record labels, but the debate surrounding it has been described as "a landmark moment on the path to the inevitable modernisation of the music industry"[1]. In 2014, before she was breaking Spotify's streaming records (and had us all asking, again, why Jake Gyllenhaal still has that scarf), Taylor Swift famously pulled her entire catalogue from the music-streaming giant and sparked widespread debate about the equity of streaming services for musicians.

That debate has continued to rumble on over the past few years and, in the latter part of 2020, following the music-streaming boom no doubt caused by national lockdowns, the UK Department for Culture, Media and Sport (DCMS) announced the formation of a Select Committee to carry out an inquiry into the economics of music streaming platforms. The inquiry essentially asked "whether the business models used by major streaming platforms are fair to the writers and performers who provide the material".

DCMS music streaming inquiry

Following the inquiry, which involved months of evidence sessions with interested parties (from artists, such as Nile Rodgers, to representatives of major labels, such as Warner Music), the DCMS Select Committee published its recommendations in its July 2021 report (the Report).

Although the Committee accepted that music streaming had made significant and positive contributions to the music industry, both in respect of boosting profits and in respect of tackling decades-long music piracy issues, the Report called for a "complete reset" of the current model.

The Report highlights deep concerns about major record companies profiting from music streaming, while the majority of independent labels, self-releasing artists and performers continue to struggle in the industry. The Report also sets out the Committee's recommendations for a "broad yet comprehensive" range of legislative and regulatory reform, which included:

• Equitable remuneration for performers of streamed music;
• More efficient licensing and royalty chains;
• Introduction of rights that would give creators greater leverage when negotiating contracts with music companies, such as a right to "recapture works" and a right to contract adjustment (e.g. where an artist's royalties are disproportionately low compared to the success of their music);
• Greater transparency for artists about the terms on which their works are exploited;
• Referral of the case for a market study on the economic impact of dominance by the major music companies to the Competition and Markets Authority; and
• Review of whether UK copyright law is fit for purpose and that appropriate mechanisms are in place for rights holders in music to enforce their IP rights.

The government – in its response published on 15 September 2021 – described the Report as a "key moment for the music industry" and generally set out its commitment to reform.

The UK Copyright (Rights and Remuneration of Musicians, Etc.) Bill

The Private Members' Bill, which was drafted as a response to the DCMS music streaming inquiry, sought to remedy the issues identified by the Report. In particular, the Bill aimed to ensure performers and composers are properly remunerated for streams of their work by proposing amendments to the Copyright, Designs and Patents Act 1988 that would introduce an equitable remuneration for artists, as well as provisions for greater transparency and contract adjustment and/or revocation.  

The spirit of the Bill appears to have been met with widespread support but there was some concern as to whether it truly provides solutions to the issues raised in the Report, and whether it might instead inadvertently jeopardise music labels' ability to invest in new creative talent.

Although the government is clearly willing to make legislative reform where needed, it has at this stage rejected the Bill (as is often the case with Private Members' bills) and called for industry-led solutions. The government has also committed to setting out its further proposals to tackle the current issues presented by music streaming by no later than September 2022.

The future of streaming

The Bill is unlikely to make further progress but the debate has demonstrated there is still an appetite, and substantial cross-party support, for a total overhaul of the current music streaming system. Expect to see, over the coming weeks and months, continued pressure (from the Fix Streaming and #BrokenRecord campaigns, among others) on both the government and music industry leaders to introduce measures to modernise the industry and better provide for creators.

Who knows, perhaps we will start to see renewed enthusiasm for blockchain as a solution to many of the music industry's current issues?

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[1] Graham Davies, CEO of The Ivors Academy