Recommendations & Conclusions
25 items
1
Conclusion
Second Report - Economics of music stre…
Streaming has undoubtedly helped save the music industry following two decades of digital piracy but it is clear that what has been saved does not work for everyone. The issues ostensibly created by streaming simply reflect more fundamental, structural problems within the recorded music industry. Streaming needs a complete reset. …
Government response. The publication of the Committee’s report is a key moment for the music industry. The Government welcomes it and thanks the Committee, and all those who contributed to its inquiry, for its work. This is a welcome opportunity to reflect …
Department for Culture, Media and Sport
2
Recommendation
Second Report - Economics of music stre…
We urge Universal and Warner to look again at the issue of unrecouped balances with a view to enabling more of their legacy artists to receive payments when their music is streamed.
Government response. The Government notes the evidence presented to the Committee that the contractual arrangements between performers, labels and platforms appear to disadvantage some players in the streaming environment. This is corroborated by the Creators’ Earnings research. It highlights the complexity of …
Department for Culture, Media and Sport
3
Conclusion
Second Report - Economics of music stre…
The pitiful returns from music streaming impact the entire creative ecosystem. Successful, critically acclaimed professional performers are seeing meagre returns from the dominant mode of music consumption. Non-featured performers are frozen out altogether, impacting what should be a viable career in its own right, as well as a critical pipeline …
Government response. The publication of the Committee’s report is a key moment for the music industry. The Government welcomes it and thanks the Committee, and all those who contributed to its inquiry, for its work. This is a welcome opportunity to reflect …
Department for Culture, Media and Sport
4
Recommendation
Second Report - Economics of music stre…
The major music companies and independent record labels have consistently asserted that music streaming is straightforwardly ‘making available’, and therefore performers should be remunerated as though it was a sale. However, this classification does not consider the complexities of streaming that sets it apart from other modes of consumption. For …
Government response. The Government notes the evidence presented to the Committee that the contractual arrangements between performers, labels and platforms appear to disadvantage some players in the streaming environment. This is corroborated by the Creators’ Earnings research. It highlights the complexity of …
Department for Culture, Media and Sport
5
Conclusion
Second Report - Economics of music stre…
The right to equitable remuneration is a simple yet effective solution to the problems caused by poor remuneration from music streaming. It is a right that is already established within UK law and has been applied to streaming elsewhere in the world. A clear solution would therefore be to apply …
Government response. The Government notes the evidence presented to the Committee that the contractual arrangements between performers, labels and platforms appear to disadvantage some players in the streaming environment. This is corroborated by the Creators’ Earnings research. It highlights the complexity of …
Department for Culture, Media and Sport
6
Recommendation
Second Report - Economics of music stre…
We recommend that the Government legislate so that performers enjoy the right to equitable remuneration for streaming income. Amending the Copyright, Design and Patents Act 1988 so that the making available right does not preclude the right to equitable remuneration, using the precedent set by the co-existence of the rental …
Government response. The Government notes the evidence presented to the Committee that the contractual arrangements between performers, labels and platforms appear to disadvantage some players in the streaming environment. This is corroborated by the Creators’ Earnings research. It highlights the complexity of …
Department for Culture, Media and Sport
7
Recommendation
Second Report - Economics of music stre…
Despite being an important part in the music creation and music streaming process, song rightsholders are not effectively remunerated for their work. The Government should work with creators and the independent publishing sector to explore ways in which new and upcoming songwriters and composers can be supported to have sustainable …
Government response. The Government agrees that song rightsholders are an important part of the music creation and music streaming process. As such, it wants to explore ways in which new and upcoming songwriters, composers and independent publishers can be better supported whilst …
Department for Culture, Media and Sport
8
Recommendation
Second Report - Economics of music stre…
Metadata issues compound the poor terms on which creators are remunerated. Whilst there is a significant challenge, it is not insurmountable. First, the Government must oblige record labels to provide metadata for the underlying song when they license a recording to streaming services. Second, it should push industry by any …
Government response. The Government agrees that longstanding issues with the availability and quality of data hamper the ability of artists to be remunerated. An IPO report “Music 2025 – the Data Dilemma” published in 2019 highlighted the problems surrounding the quality of …
Department for Culture, Media and Sport
9
Recommendation
Second Report - Economics of music stre…
The licensing and royalty chains of song rights causes considerable confusion and complexity to the system, and songwriters and composers pay the price. There is no single solution to create more efficient and timely royalty chains but the Government can work with industry to facilitate this. The Government should require …
Government response. The Government recognises that transparency in the streaming sector is an issue and that action in this area could be of significant benefit to musicians. The Government’s view is that this is an issue that the industry can, and should, …
Department for Culture, Media and Sport
10
Recommendation
Second Report - Economics of music stre…
There is no doubt that the major music groups currently dominate the music industry, both in terms of overall market share in recording and (to a lesser extent) in publishing, but also through vertical integration, their acquisition of competing services and the system of cross-ownership. We recommend that the Government …
Government response. The Government believes that transparency and fairness in the global streaming environment are important and is very aware of the pressures on music creators. The Government notes the DCMS Select Committee’s concerns about the possible market dominance of the major …
Department for Culture, Media and Sport
11
Recommendation
Second Report - Economics of music stre…
The Government must make sure that UK law is not enabling the outcome of market dominance. This means that independent labels must be supported to challenge the majors’ dominance and creators must be empowered to offset the disparity in negotiating power when signing with music companies. The Government should expand …
Government response. The Government disagrees with this recommendation. The aim of the Music Export Growth Scheme (MEGS) is to overcome the market failure of UK independent music small and medium enterprises (SMEs) having insufficient funds to run high-quality marketing campaigns to break …
Department for Culture, Media and Sport
12
Recommendation
Second Report - Economics of music stre…
We recommend that the Government concurrently expand creator rights by introducing a right to recapture works and a right to contract adjustment where an artist’s royalties are disproportionately low compared to the success of their music into the Copyright, Designs and Patents Act 1988. These rights already exist elsewhere, such …
Government response. The Government will commission research on these issues, particularly into countries that have implemented similar measures. This will help to build the evidence base and improve our understanding of the impacts of such rights, which will inform whether and how …
Department for Culture, Media and Sport
13
Conclusion
Second Report - Economics of music stre…
Despite the general consensus that direct licensing between the record industry and streaming services is positive, there are ongoing concerns about the majors’ 106 Economics of music streaming position in negotiation, which allows them to benefit at the expense of independent labels and self-releasing artists, particularly regarding playlisting. This is …
Government response. The Government believes that transparency and fairness in the global streaming environment are important and is very aware of the pressures on music creators. The Government notes the DCMS Select Committee’s concerns about the possible market dominance of the major …
Department for Culture, Media and Sport
14
Recommendation
Second Report - Economics of music stre…
As long as the major record labels also dominate the market for song rights through their publishing operations, it is hard to see whether the song will be valued fairly as a result. It is well-evidenced that redressing the disparities in relative value between the song and recording has occurred …
Government response. The Government notes the DCMS Select Committee’s concerns about the possible market dominance of the major music groups and the potential for contractual agreements between the major music companies and streaming services to stifle innovation in the 10 Government and …
Department for Culture, Media and Sport
15
Conclusion
Second Report - Economics of music stre…
Artists and their representatives face a systemic lack of transparency from both music companies and the streaming services that license their works. This exacerbates the inequities of creator remuneration by creating information asymmetries and preventing them from undertaking their right to audit. Creators and their representatives have a right to …
Government response. The Government recognises that transparency in the streaming sector is an issue and that action in this area could be of significant benefit to musicians. The Government’s view is that this is an issue that the industry can, and should, …
Department for Culture, Media and Sport
16
Recommendation
Second Report - Economics of music stre…
The Government has repeatedly told us that it will not implement in UK law provisions akin to those established by the Directive on Copyright in the Digital Single Market. We accept that the Directive is not a silver bullet to the music industry’s problems, but it is a step in …
Government response. The Government recognises that transparency in the streaming sector is an issue and that action in this area could be of significant benefit to musicians. The Government’s view is that this is an issue that the industry can, and should, …
Department for Culture, Media and Sport
17
Recommendation
Second Report - Economics of music stre…
Music curators play an important role in the discovery and consumption of digital music and are influential in how creators are remunerated. It is, therefore, unsurprising that music creators are putting more resources into catching the eye of these curators. Where curators are paid or receive benefits in kind for …
Government response. The Government agrees with this recommendation. It has engaged with the Advertising Standards Authority (ASA) who have highlighted that every instance of the interaction of commercial and editorial expression requires consideration on its own merits. Disclosure requirements already exist across …
Department for Culture, Media and Sport
18
Recommendation
Second Report - Economics of music stre…
Algorithms are fundamental to the operation of streaming services. However, many questions remain about how they influence music consumption and how much oversight exists. The Government should commission research into the impact of streaming services’ algorithms on music consumption, including where creators are forgoing royalty payments in exchange for algorithmic …
Government response. The Government agrees with this recommendation. It agrees that there would be value in conducting further research on recommendation algorithms used by streaming services and takes the growing role of algorithms seriously. The Centre for Data Ethics and Innovation (CDEI) …
Department for Culture, Media and Sport
19
Recommendation
Second Report - Economics of music stre…
The market for streaming services itself is fiercely competitive. However, there is the potential that companies may leverage other aspects of their business or elsewise use vertical integrations to gain a competitive advantage; indeed, some jurisdictions have considered that this is already happening in some areas. It is important that …
Government response. The Government launched its consultation on the new pro-competition regime for digital markets in July 2021. The proposals include new rules to ensure consumers and businesses are treated fairly, and measures to drive a more vibrant and innovative economy across …
Department for Culture, Media and Sport
20
Recommendation
Second Report - Economics of music stre…
The Government must ensure that the challenges posed by music streaming to the UK’s prominence regime are duly considered.
Government response. The Government agrees with this recommendation. As this report and the Committee’s report into the ‘Future of public service broadcasting’ have set out, a major shift is taking place in the way that people are discovering and accessing audio-visual and …
Department for Culture, Media and Sport
21
Conclusion
Second Report - Economics of music stre…
Safe harbour provisions that have been transposed into UK law have profoundly impacted the market for digital music consumption. YouTube’s dominance of the music streaming market shows that the market has tipped. Safe harbour gives services that host user-generated content (UGC) a competitive advantage over other services and undermine the …
Government response. The Government agrees that rightsholders should be properly remunerated when their works are used and shared online, for example on user-generated content platforms like YouTube. It also recognises that many testimonies to the Committee’s inquiry outlined some of the difficulties …
Department for Culture, Media and Sport
22
Conclusion
Second Report - Economics of music stre…
We note that the CMA has developed a pro-competition framework for tech companies with ‘strategic market status’ that dominate digital markets. The CMA should consider exploring designating YouTube’s streaming services as having strategic market status to encourage competition with its products.
Government response. The CMA notes the Committee’s recommendation to the government regarding a market study examining the dominance of the major music groups. The CMA is liaising with relevant Departments on this issue, and it is expected that this recommendation will be …
Department for Culture, Media and Sport
23
Recommendation
Second Report - Economics of music stre…
As we have acknowledged, the Government has repeatedly told us that it will not implement the Directive on Copyright in the Digital Single Market. However, to ensure that music creators and companies prosper in the globally important UK music market, the Government must provide protections for rightsholders that are at …
Government response. The Government agrees that rightsholders should be properly remunerated when their works are used and shared online, for example on user-generated content platforms like YouTube. It also recognises that many testimonies to the Committee’s inquiry outlined some of the difficulties …
Department for Culture, Media and Sport
24
Conclusion
Second Report - Economics of music stre…
The debate between the predominant pro-rata payment model and alternative methodologies such as user-centric has been compelling. It is positive that new services are inventing new and creative ways to address creators’ and consumers’ concerns about the fairness and transparency of creator remuneration from streaming. We are concerned, however, that …
Government response. The Government believes that transparency and fairness in the global streaming environment are important and is very aware of the pressures on music creators. The Government notes the DCMS Select Committee’s concerns about the possible market dominance of the major …
Department for Culture, Media and Sport
25
Recommendation
Second Report - Economics of music stre…
As technology continues to evolve, the Government must ensure that copyright law is fit for purpose and that appropriate mechanisms are in place for rightsholders to enforce their rights. The Intellectual Property Office must not be a passive witness but an active player, particularly in areas of systemic contestation between …
Government response. 1. The proposed new pro-competition regime for digital markets to be operated by an independent Digital Markets Unit (DMU) within the CMA has not yet been finalised. It is currently the subject of a consultation which ends on 1 October …
Department for Culture, Media and Sport