MP’s to Investigate the ‘Economic Impact’ of Music Streaming
Much to the delight of the music industry, the Digital, Culture, Media and Sport Committee (DCMS) announced on 15 October 2020 that an inquiry is to be launched into the economics of the music streaming industry.
The Context of the Inquiry
The inquiry appears set to examine the following aspects of the global music streaming industry:
- The ‘business models’ operated by music streaming service providers and whether, in their present state, they promote sustainability for the music industry at large;
- Whether the ‘algorithmic curation’ of playlists unfairly balances listenership figures in favour of more established artists; and
- How the Government can protect the industry from knock-on effects, such as the increased piracy of music.
Reading between the lines of the specific inquiries, the Committee appears primarily concerned with addressing the commonly referenced ‘value gap’ in the music industry.
The ‘value gap’ is the term used to illustrate the disparity between the revenue the music streaming giants generate and what the artists receive as royalties. To exemplify the disparity, the DCMS note that streaming giants such as Spotify, Apple Music, Amazon Music and Google Play account for over 50% of the revenue of the global music industry and its contributors receive as little as 13% of this revenue. To flesh this out further on a localised scale, of the 114 billion music streams which took place in the UK last year, over £1 billion revenue was generated. Of this £1 billion revenue, Spotify is thought to pay its artists between £0.002 and £0.0038 per stream, with Apple Music paying around £0.0059.
The Contents of the Inquiry
As noted, the Committee have called for the submission of evidence on the following:
Dominant Business Models
The Committee seek submissions as to the dominant business models of the platforms that offer streaming, how these differ among competitors and whether there are alternative models available. With the Committee “hoping that the inquiry will show that a more equitable model is possible” it appears that the inquiry may begin with the presumption that the market presently adopts an inequitable position.
The Committee also seeks submissions as to whether the new features associated with streaming platforms, such as the algorithmic curation of music or company sponsored playlists, influences consumer habits and tastes. With the rise of company sponsored playlists such as those promoted by Gymshark (music for exercise) and KFC (which exclusively includes tracks which reference the fast-food chain) the Committee are concerned that despite these algorithms maximising income from streaming “they are a blunt tool to operate in a creative industry with emerging talent risking falling at the first hurdle”. Whilst as the listener we may at times be grateful for curated playlists, there is an inherent risk that our ears are being pointed away from newcomers to the industry and directed towards established artists with a consistent audience and marketability.
Aside from the intricacies of music streaming services, the Committee have also expressed their concerns with how the Government can protect the industry from any knock-on effects, such as the increased piracy of music and whether the UK needs an equivalent of the Copyright Directive in response. The Committee recognises that the piracy of music remains a large contributor towards the ‘value gap’.
In the short term, the inquiry looks to examine whether the ‘business models’ used by the music streaming giants inherently disadvantage the performers and writers that provide the streamed material. Longer term, the inquiry seeks to examine the implications of streaming on the music industry, including for artists, record labels, record shops, etc. The Musicians’ Union for one, welcomed the inquiry, particularly following concerns about the amplification of the ‘value gap’ throughout the COVID-19 pandemic with artists losing touring as their main revenue stream.
Deadline for submissions
The call for evidence by the Committee extends to all those involved in the music streaming industry such as industry experts, artists and record labels as well as streaming platforms themselves. Evidence is to be submitted by 6pm on Monday 16 November 2020 via the following link.
Strategic Planning for Modern Landed Estates
The second in our series of articles on succession planning for landed estates covering a wide variety of matters.
When can you set off claims against different elements of a project
The Court’s decision raises important drafting considerations for construction contracts involving multiple elements of a project.
Drafting terms and conditions or negotiating a contract? Be wary of "unusual" and "exorbitant" exclusion clauses
When drafting a set of terms and conditions, companies must adhere to the requirements contained in the Unfair Contract Terms Act 1977
Stop, collaborate and listen: Top 10 Tips with Collaboration Agreements
Providing you with the top ten tips on collaboration agreements - what should you know?
Fiona Edmond and Mark Smith write for Property Week on data centres as an infrastructure asset class
The complexity of operational issues is something those new to the sector may not anticipate and interest is likely to increase.
Preparing your company for sale
We set out here some initial steps to consider in anticipation of a sale.
ESG investment and the challenges for trustees
What challenges does the ESG revolution present for trustees of private family trusts?
The impact of COVID-19 on commercial and residential tenancies
What impact has COVID-19 had on commercial and residential tenancies? Read more here.
Charles Russell Speechlys advises discoverIE on its acquisition of Antenova
discoverIE is a leading international designer, manufacturer and supplier of customised electronics to industry.
Q&A: Separate blocks, common parts and enfranchisement
Miriam Seitler and Lauren Fraser answer queries relating to leaseholders seeking to acquire the freehold.
2020: Influencer, 2021: Creative Director – what could go wrong?
Coded messages for landlords and tenants
“What does the code of practice mean for landlords and tenants? Read more here”
The family court’s role in micro managing 'trivial' disputes
The recent decision has dealt with the family court’s role in micro managing “trivial” disputes in relation to children
Gareth Mills writes for Lexology Getting The Deal Through on technology disputes in Bahrain
The most common disputes occur following perceived or actual failures to deliver required technology services an lack of clarity.
Taxing horizons and fiscal black holes
A super-massive black hole at the centre of the nation’s finances means that tax reform and rates rises look increasingly likely.
Charles Russell Speechlys advises Acora on acquisition of Westgate IT
Westgate IT specialises in providing IT support to businesses in the South West.
Jason Saiban writes for Food Manufacture on the food industry's climate change challenge
The key challenge will be how the environmental targets are actually met.
Q&A: Wrestling with restrictive covenants
Camilla Lamont (barrister at Landmark Chambers) and Real Estate Disputes Partner Emma Humphreys answer a pair of covenant queries
Grab the tail by the horns - Why is tail spend so critical in today’s outsourced portfolio?
It’s usually invisible, but in all likelihood, you’ve got tail spend.
Charlotte Duly writes for Intellectual Property Magazine on the implications of the Court of Appeal’s decision in SkyKick on both bad faith and specification drafting
Trademark law was dominated by SkyKick in 2020 and it was in the spotlight again in 2021 following a Court of Appeal judgment in July.