In a major milestone for the Fix Streaming campaign, MPs on the Digital, Culture, Media and Sport Select Committee asked questions about where the money goes and what they recommend the Government do to make the system fairer.
Major labels define streaming as ‘making available’, which allows them to do direct deals with platforms and keep most of the revenue instead of giving creators a fair and guaranteed income stream. But this doesn’t reflect how people use streaming services, and it takes money away from creators like you.
That’s why our top ask is to reclassify streaming as a ‘communication to the public’ – like radio. “That way, the money is split 50/50 between the record labels and the artists,” Horace told MPs.
“I think performers are being cheated,” said Horace. “Streaming doesn’t pay anything to studio musicians. A studio musician could play on a track that becomes the most successful recording in any year and still only be paid £120 for their session and no more money apart from that,” he explained to MPs.
That’s why we’re calling for Equitable Remuneration (ER). This would generate PPL royalties, which would ensure that session players get their fair share from the very first stream.
Recognising the value of the song
The MU and the Ivors Academy are also arguing that more streaming revenue should go to songwriters.
As Graham explained, “Streaming is a song economy” with listening based on songs more than albums. But it’s in the interest of major labels to keep the value of the song low – at or below 15% of the overall pot. This is because major publishers are owned by major labels and publishers pay out on much better terms to songwriters than labels do to artists.
We want to see the share of revenue attributed to the song increase, so that all those who make streaming possible get fairly paid.
Being open about where the money goes
“Those that are suffering most from the current arrangement, who see the least of the money would absolutely be the music creators,” Graham told MPs on the DCMS Select Committee.
“I think that this inquiry has been very well received by our community because there's an increasing lack of trust in the system, understanding where monies really are going... And I think that's feeding through into consumer trust eroding as well,” he said.
“The only way to make any money from recorded music these days is to work for a record label," Horace added.
Perhaps the best evidence of this came in the second session of the music streaming inquiry; if a legend like Nile Rodgers has to fight to be paid fairly for his work, what does that mean for everyone else?
Creators are struggling while major labels make millions
Major labels announced record profits over the last year. Meanwhile, our poll of Musicians’ Union and The Ivors Academy members showed:
- 82% of respondents earned less than £200 from streaming, from all of their music across all platforms in 2019. This included members with thousands, hundreds of thousands, and millions of streams.
- 92% made less than 5% of their earnings from streaming
- 43% got a job outside of music because of insufficient income from streaming
The statistics speak for themselves. Creators are struggling while major labels make millions. Trickle-down economics in streaming just does not work, and simply growing the streaming pie won’t fix the problem.
It’s time for real change; re-defining streaming as a communication to the public, increasing the value of the song, applying equitable remuneration to streaming, and being open about where the money goes. Together we can fix streaming and keep music alive.
Find out more about our Fix Streaming campaign in partnership with The Ivors Academy, including highlights of the music streaming inquiry so far, in our dedicated campaign hub.