The MU is sitting around the table with major labels, Council of Music Makers and industry stakeholders to come to a better deal for musicians and music creators. Image credit: Shutterstock.
Music streaming revenue is distributed roughly as follows:
- 30% streaming platform
- 55% record label
- 15% music publisher.
The record label will pay signed artists according to their contracts. However, we think that many contracts are outdated and unfair – and that public and political opinion on this issue is on our side.
You can see it in our latest video on Instagram, TikTok and YouTube; we asked people what they thought of how music streaming royalties are split and they had very strong reactions to it.
Why do musicians not get streaming royalties?
There are many reasons why musicians are missing out. Most artists' contracts were signed before streaming became the usual way for people to access music. Many are on low royalty rates, much lower than the modern 30%.
Many artists receive no streaming royalties because they have never 'recouped' financial advances they received or the costs of making the recording.
These may be reasons why an artist like Lily Allen makes more money from foot videos on OnlyFans than she makes from Spotify.
And while traditional broadcast radio pays guaranteed royalties to featured and non-featured artists, streaming doesn't. That means session players don’t get paid for the streaming of their work at all.
A system that works for the major labels
When we talk about recouping financial advances, we’re talking about ALL the costs of recording, marketing and distributing a recording that must be paid back by the artist out of their share of royalties.
No wonder many artists never achieve this! The label in these cases is keeping all the revenue and can be in substantial profit long before the signed artist receives a penny.
@wearethemu
It's that time of year again! Your music streaming #wrapped is ready. What do you think of ours? Share this video #FixStreaming Video description: yellow, blue and purple graphics featuring circles, stripes and waves on a black background. Text says: "It's that time of year again! Your Streaming Wrapped is ready! Are you? It doesn't matter how many minutes you listened to, your favourite artists are not being paid fairly from music streaming. Luckily we took notes too. Royalties unwrapped: platform 30%, label 55%, music publisher 15%, artist ?!% *how much each artist gets depends on their label and contract. What about session players? 0% Oh! Looks like we have company..." A white frame appears featuring a clip of Musicians' Union General Secretary Naomi Pohl. She's at Labour Party Conference, established by a big red banner that says "Change begins" followed by Naomi talking to camera. She's wearing a white top and black cardigan and is standing in front of a black, yellow and white stand backdrop that says "We Are The M U" and "behind every musician" in all caps.
♬ original sound - WeAreTheMU
Songwriters and composers receive a 70-80% royalty from the music publisher usually, but the share of overall revenue that goes to the publisher is only 15%.
So, what do musicians want from labels and platforms?
- A modern digital royalty rate to be paid on all record and publishing deals, with a catalogue-wide commitment to pay royalties based on at-source income without deductions
- A rolling commitment to pay through on unrecouped balances on all record and publishing deals
- Performer remuneration in the form of a new performer fund or extension of the existing session fund, managed by PPL that receives a percentage of streaming revenue to be distributed to featured and non-featured performers
- A commitment to standardise support for those who work speculatively on sessions that are commissioned by record labels, which might include per diems, points on recordings and holding fees on works where publication is restricted by labels - not to be recoupable from artist income
- A use it or lose it commitment, a recurring contract adjustment right for unfair terms not otherwise covered by the code and a reversion of rights after fifteen years (applied retrospectively) for artists stuck in legacy contracts from the pre-streaming era.
Musicians and music creators need a better deal
The MU is currently sitting around the table with major labels, Council of Music Makers and industry stakeholders as part of the government-convened Creator Remuneration Working Group.
Its purpose is to bring the music industry together to come to a better deal for musicians and music creators – with legislation on the cards if no agreement is reached.
Learn more about how the music industry can fix streaming at this free Fix Streaming webinar on Tuesday 25 February, hosted by the Council of Music Makers.