Music industry artists have been brought to their knees as a result of a payment imbalance in the music streaming model, a government inquiry has heard.
Speaking at the UK government's Digital, Cultural, Media and Sport (DCMS) committee meeting on Tuesday 24th November, Guy Garvey of Elbow, Ed O’Brien of Radiohead and critically acclaimed solo artist Nadine Shah all provided evidence about the difficult situation artists are facing as a result of flaws in the streaming model.
The inquiry has been set up by the DCMS to investigate the impact of streaming on the future of the music industry, considering whether artists are paid fairly by music sharing giants including Spotify and Apple Music under their current business models. MP’s are also investigating if the platform’s algorithms and playlists are creating an unfair playing field and one biased towards industry giants and unsupportive of new music.
Streaming platforms make up over half of the revenue accumulated by the music industry globally, and it is now the main source of income for the record industry generating over £1 billion last year. But the issue is the clear disparities in the payment model as artists are seeing as little as 13% of the income generated from one stream, whilst some of the larger record labels are enjoying the biggest increase in yearly profits in their existence.
Speaking to the committee about the situation, Mercury-nominated Nadine admitted that despite all of her recent success and large fan base, she is struggling to keep the wolf from the door and facing the stark reality that in the future she may not be able to afford her rent, “It is getting to the point where people can’t afford to be musicians” she told the inquiry.
Guy Garvey, when asked about his view, told the committee “The system as it is, is threatening the future of music. That sounds very dramatic but if musicians can’t afford to pay their rent, if they can’t afford to live, then we haven’t got tomorrows music in place”.
Spotify, which currently pays around £0.002 to £0.0038 per stream, is one of many streaming services that have a contractual agreement with the record labels and publishers in which they split the revenue from a stream 30/70. The 70% goes to the record label who typically take 55% of the cut leaving the artists and creators of the music with only 15% of the profit, despite all of the effort and time they have put into creating a song.
Tom Gray, guitarist and singer of rock band Gomez and founder of the #BrokenRecord campaign, explained that a lot of musicians are finding themselves in constant debt to their record labels, never seeing any form of profit through their royalties even after years of commercial success.
What Gray is campaigning for through #BrokenRecord, which was supported by Elbow’s Guy Garvey and other witnesses, is the introduction of equitable remuneration, which is a pre-meditated contractual agreement between artist and record label which would fairly distribute revenue from a stream 50/50 rather than artists seeing such an unfair percentage. Equitable remuneration is currently implemented when songs are played on the radio through broadcasting, and Tom argued the same can definitely be done on streaming platforms.
Despite criticism about the imbalanced payment model, the witnesses had plenty of praise for music streaming services and what they have done for the industry, when asked about his overall opinion Radiohead guitarist Ed O’Brien said “I think they’ve had a really positive impact on the music industry. I founded this organisation called the Featured Artists Coalition and the biggest issue we were dealing with then was illegal file sharing through Limewire and Napster. The revenues went right down and we were asking ourselves, how do we deal with this? What’s been brilliant about streaming is the norm of behaviour has shifted”.
Ed continued to argue that Spotify and other streaming platforms have taken away the problems of illegal file sharing, “there is more optimism in the industry and more money coming into it but we do still need some fairness in the system and many artists are clearly not profiting from the spoils of streaming”.
The inquiry continues next Tuesday (8th December) with evidence being put forward from record label executives, industry experts and artists including the legendary Nile Rodgers.
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