Music Week noted a change of tone on streaming reform from the new government a year ago, as it pledged to “address concerns” over music creators’ earnings from streaming services.
Twelve months on, we have the package of reforms announced by Culture Secretary Lisa Nandy and Creative Industries Minister Chris Bryant (pictured together).
The industry-led measures were part of the process overseen by the government in the Creator Remuneration Working Group. There’s also a commitment to monitor the measures for 12 months to ensure they are boosting income for music creators.
The issues with streaming income go back several years. The streaming inquiry launched almost five years ago during the pandemic; the CMS Select Committee’s streaming report, which called for a reset of the model, came out the following year.
However, a subsequent CMA (Competition & Markets Authority) report in 2022 did not endorse such a thoroughgoing shake-up – arguing that streaming offers “new opportunities for global reach in a way previously unimaginable”. At the time, the BPI welcomed the “objective, evidence-based report which confirms that the streaming market is competitive – delivering fans accessible and affordable music and artists greater choice in an environment in which many more are succeeding and where artist and songwriter royalty rates have increased”.
Almost three years on, however, DCMS ministers have decided to act. While there has been no overarching market intervention, they have now overseen a series of reforms having secured industry agreement – the most eye-catching of which was the £75 per diem from major labels to cover expenses for songwriters attending sessions.
Music Week understands that there was some tough negotiating in the run-up to the big announcement.
Sir Chris Bryant certainly seems more engaged with music than most ministers in the previous Conservative government, with perhaps the exception of heavy metal fan and fellow knight of the realm, Sir John Whittingdale. And Sir Chris clearly expected to see results from the working group sessions.
“There are several areas where I’ve said that we might choose to legislate,” he told a Parliamentary committee in May. “Another area is in the remuneration of musicians and artists [from streaming]. If we have to legislate in that sphere, we will. And, of course, we’re looking at legislating in the secondary ticketing market.”
“The outcome of this process is a set of measures that are designed to deliver real benefits for UK creators,” stated the latest DCMS announcement.
The government said it marks a further step towards “improving terms and practices in relation to music streaming and ensuring the market works for everyone”, as well as a commitment to “far greater clarity on how legacy artists can seek renegotiation of their contracts”.
Best practice needs to reflect the diversity of business models across the independent sector
Gee Davy
As well as greater label support for songwriters and session musicians, there is also a suite of measures for legacy artists to ensure that they can all (not just the streaming catalogue stars) benefit from a streaming economy that was not even envisaged in their original contracts.
This agreement will sit alongside the Music Growth Package – with funding doubled up to £10 million a year for three years – announced as part of the Creative Industries Sector Plan.
“This government looks forward to the music industry advancing this work on music streaming and delivering on our objectives of promoting a sustainable music ecosystem that truly supports its creators,” added the DCMS statement.
The UK divisions of the three major label groups – Sony Music UK, Universal Music UK and Warner Music UK – have committed to implementing the principles. They will be communicating their own individual company programmes to benefit legacy artists, songwriters and musicians.
The major company programmes alone represent an investment of tens of millions of pounds into the UK music industry by 2030, according to the BPI.
The BPI also recommends the package to its 500-plus independent label members, who are encouraged to introduce similar targeted support in a “manner that is proportionate and fitting with the specifics of their businesses”.
The outcome of this process is a set of measures that are designed to deliver real benefits for UK creators
DCMS
While it appears that the majors have offered concessions beyond what the previous government might have brokered, Music Week understands that they are largely content with the conclusion to a lengthy process and multiple meetings of the Creator Remuneration Working Group.
The measures on legacy artists chime with existing major label initiatives, such as Sony Music’s Legacy Unrecouped Balance Programme, which launched four years ago and has paid out millions of dollars to both qualifying artists and songwriters.
If anything, the package may be more challenging for parts of the independent sector, which has not signed up to the songwriting payments measures (though it is being encouraged to adopt them).
Looking back at Music Week’s streaming inquiry coverage in 2021, indie giant Beggars welcomed an increase in streaming royalty rates particularly for legacy acts – but also defended life of copyright deals and said any law allowing rights to revert would be “disastrous” for the company’s catalogue business.
“As the announcement highlights, best practice needs to reflect the diversity of business models across the independent sector. A uniform solution won’t be suitable for all,” said Association of Independent Music (AIM) CEO Gee Davy. “AIM encourages mutually respectful dialogue between labels and creators to ensure the best outcomes. AIM re-commits to continue to regularly engaging with other industry bodies to promote fair and sustainable practices that reflect today’s music economy.”
The fundamental problems with music streaming economics remain
Naomi Pohl
The measures don’t necessarily go far enough for all the key players in an industry debate that’s now been rumbling on for several years.
Musicians’ Union general secretary Naomi Pohl said: “We are grateful to Minister Chris Bryant for the pressure he has put on record labels, and the majors in particular, to improve terms for artists on older contracts. While an uplift on minimum session rates was achieved by the MU in negotiation with the BPI last year, this doesn’t address a lack of royalties for session musicians and we also want to see modern royalty rates for all signed artists.
“The fundamental problems with music streaming economics remain. For that reason, we will shortly launch a petition calling for copyright reform. We have also secured an additional meeting with the Minister in September to discuss session musician remuneration specifically.”
The Council of Music Makers, which includes the Musicians’ Union, is still campaigning to ‘fix streaming’, including the following measures:
– A minimum, modern digital royalty rate to apply on all signed artists’ contract regardless of when they were signed
– A rolling commitment to write-off unrecouped balances of signed artists after 20 years
– Rights reversion so artists and songwriters can reclaim their rights after a set period of time
– Streaming royalties for session musicians
– A right to contract adjustment, which would mean updating unfair or outdated terms in old contracts.
Having helped to bring about measures to help low income music creators, Sir Chris Bryant and his DCMS colleagues may well continue to face calls to intervene further in the streaming economy.
The full package of label-led measures unveiled by DCMS and created by the BPI is below.
PHOTO: Getty/Nicola Tree
PRINCIPLE 1 : Royalties & Commercial Support for Legacy Artists
The BPI recommends all UK labels provide bespoke financial support for legacy artists designed to improve their streaming outcomes by:
Disregarding unrecouped advances on contracts signed before 1 January 2000 for artists who have not received additional advances since that date and paying royalties to legacy artists at their contractual royalty rate.
And putting in place company initiatives that either: roll forward the cut-off dates for these policies on an annual basis.
Or
Provide a programme of bespoke support to revitalise legacy catalogues with the aim to generate ongoing income for artists. Participants will receive support which may include but is not limited to digitisation of deep catalogues, catalogue & artist marketing initiatives & spend and non-recoupable grants/funding.
PRINCIPLE 2 : Technical & Marketing Support for Legacy Artists
The BPI recommends all UK labels provide bespoke support for legacy artists designed to improve their streaming outcomes by:
Digitalising previously unexploited works from legacy artists’ deeper catalogues that are artistically and commercially viable so they can be distributed on DSPs.
Providing bespoke marketing and administrative support so legacy artists can cultivate a modern-day audience with a focus on social platforms
Advising legacy artists on how to reactivate their full catalogues.
Reserving marketing budget and other funding specifically for legacy artists if needed.
PRINCIPLE 3 : Contract Renegotiation for Legacy Artists
The BPI recommends all UK labels provide bespoke support for legacy artists designed to improve their streaming outcomes by:
Responding meaningfully to initial queries and requests to renegotiate legacy contracts within 60 days from the date of receipt, although the actual renegotiations may take longer.
Advising legacy artists who are seeking to renegotiate legacy contracts on key elements, including clear information on who to contact and factors the label may consider during a negotiation.
Acting reasonably and in good faith in response to requests to renegotiate.
Taking a bespoke approach to each individual contract renegotiation and in coming to a determination consider holistically all elements of the contract and the context of the commercial history between the artist and the label. By way of example this may include:
– The label’s investment to date in the artist’s career including by way of personal advances, recording costs, marketing and promotional support and tour support;
– The nature of the artist’s musical genre (e.g. classical or pop)
– The level of sales of the artist’s recordings
– The artist’s existing royalty rates
– The artist’s unrecouped balance (if any)
If a renegotiation is appropriate then the outcomes of such a renegotiation may include some of the following:
For artists whose royalty accounts remain unrecouped, disregarding some (or all) of any unrecouped balance or paying through a proportion of the artist’s royalties without regard to any unrecouped balance
Adjusting artists’ royalty rates on some formats and/or in some territories
The artist and label agreeing to new product and/or promotional commitments
Where an artist considers that a label has not engaged meaningfully in responding to a request to renegotiate within the 60 day timeframe, they should contact their most relevant trade organisation to escalate further dialogue with the label in question.
PRINCIPLE 4 : Supporting New and Emerging Songwriters
The BPI recommends all UK labels ensure emerging songwriters are not out of pocket when invited by a label to attend a songwriter session or camp, by acting in accordance with the following:
UK labels should create and communicate a clear policy to provide at least one of the following means of supporting songwriters on a case-by-case basis when they participate in a label hosted session:
Reimbursing a songwriter’s reasonable expenses and/or
Providing songwriters with a fixed per diem payment and/or
Providing other forms of financial support to upcoming songwriters
Labels should be transparent with featured artists as to whether the support provided to songwriters under this principle is a recoupable recording cost.
PRINCIPLE 5 : Increasing Minimum Session Fees for Pop and Classical Session Musicians
Labels should pay session musicians who perform on recordings upfront fees of at least the minimum rates set by the most recent agreement between the BPI and the Musicians’ Union (MU)*.
BPI commits to continue monitoring trends and fluctuations in combined broadcasting and public performance revenues and reviewing the BPI/MU Agreement accordingly.
* The new BPI/MU Agreement increases session fees by 40% for pop and 15% for classical sessions.