The British government has launched a formal investigation into Spotify payouts and broader music streaming royalties – or the lack thereof.
The House of Commons’ bipartisan Digital, Culture, Media, and Sport Committee (DCMS Committee) recently unveiled the probe, which will examine streaming’s impact upon record labels, artists, “and the sustainability of the wider music industry.” Spotify royalties – and the per-stream payments of competing streaming services like Apple Music, Amazon Music, and others – are set to be scrutinized as part of the comprehensive analysis.
On this front, the Committee has encouraged industry experts, musicians, record-label higher-ups, and even streaming platform execs themselves to submit written testimonials by the evening of Monday, November 16th. These insights will factor into MPs’ discussions and, more broadly, any government policies that the review produces.
To be sure, the Digital, Culture, Media, and Sport Committee acknowledged in its official announcement message that the UK’s approximately 114 billion streams (during 2019) produced in excess of $1.29 billion (₤1 billion) worth of revenue – but that “artists can be paid as little as 13% of the income generated.”
For reference, we previously reported on Spotify royalties and the per-stream compensation afforded to artists by other leading streaming platforms.
DCMS Committee Chair and MP for Solihull Julian Knight elaborated upon the survey’s overarching goals and significance in a statement: “Algorithms might benefit platforms in maximizing income from streaming but they are a blunt tool to operate in a creative industry with emerging talent risking failing the first hurdle.
“We’re asking whether the business models used by major streaming platforms are fair to the writers and performers who provide the material,” continued the Chester native. “Longer-term we’re looking at whether the economics of streaming could in the future limit the range of artists and music that we’re all able to enjoy today.”
A survey commissioned by the #BrokenRecord campaign (founded by Ivors Academy director Tom Gray) and conducted by YouGov is helping to inform the investigation’s discussion. Over 2,000 British adults participated in the study, and 77 percent of respondents expressed the opinion that artists and songwriters aren’t paid enough. 69 percent of surveyed individuals said they’re unwilling to spend more on subscription services. But notably, about half of these persons changed their minds when the idea of the extra fees’ reaching musicians was floated.
Lastly, the DCMS Committee investigation will also seek to determine “whether the government should be taking action to protect the industry from piracy” as EU nations prepare to implement the much-debated Copyright Directive. Member states have until June 21st, 2021 to begin abiding by the law, which will essentially place the legal liability of unlicensed media usage on the shoulders of tech and content platforms. It was revealed back in January that the post-Brexit UK wouldn’t enforce the measure.
THE GREATEST ART THEFT IN HISTORY
The model for all of us if the monopolies have their way
SpotALie STEALS with impunity in front of your face
If you leave they don’t close your account you find your music hidden all about on the site…
If you upload to a different service SpotALie STEALS it off that site and uploads onto theirs. The amount of theft across ALL STREAMING PLATFORMS IS UNREAL!!!!
Then the licencing offers show up which you never get paid for because God forbid an independent do well ANYWHERE no no no you must be stopped sign of die!!
You’ll never stop it
Your already to late!!!
Its important they go after the real issues here, which is the fact of what they are paying per stream is too low, napster is paying the most, but i’m sure most of these companies can pay more. we shouldn’t have to struggle to make ends meet while their making billions off our product. their paying out 100’s of millions, while everyone is hardly getting anything. words don’t mean anything, you have to look at the facts. it’s easy for them to say, it will benefit, but really, they only thing that benefits us is high pay per streams, their only guiding the masses to specific artists, and their mostly all back by big money, so saying we’re bring more people in, don’t make sense, because their going only to the 1 percent anyways, so we will still suffer. it’s not right. these platforms diminish our opportunity to sell, they are guiding everyone to them, so we have no way to access a viable market anymore, and that’s the truth. we should be the one to stipule what were paid, and we have capable PRO companies that can crunch the numbers and come up with a number that will benefit everyone, where not asking to take their share, we know they also need to turn a profit, but we want our rightful share, we need to turn a profit as well. i don’t want to struggle through life and either does anyone else, and we should not have too, it’s our product. we should getting majority of the profits rightly.
Does anybody ever remember ANY PROFESSIONAL musician agreeing to free music on the Internet? Were any musicians consulted before streaming rates were decided? When the fans started stealing our music they told us to get used to this “new business model” – a business model that was forced on to the musical community without us having any say in the matter. And what is left when people all steal music and pay us nothing? Oh yes, ADVERTISING REVENUES!! And so people who have no understanding about how much it costs to make quality music met up with the people how distributed the music to figure out a way to make money with free music. And did they ever think to consult with the people who actually make the music? NO! 60% of Pro musicians have quit the music business. Wonder why? Oh yes, MONEY! Or lack of it!! And the crooks who started this whole thing are now Millionaires and the musicians are all selling their equipment to survive! The only power we have over these people is TO STOP MAKING NEW MUSIC otherwise our fans get it all for free and seem to think that we are all okay with this!! Screw the music fans and Spotify. Take all your music off the Internet. Let them listen to all this dreadful tech and Rap music and when they complain that there is no good music on the radio any more tell them that is what they deserve in this new era of crap music made badly by amateur musicians in their bedrooms. Until we get a new and better system for the artists to get paid fairly there is little point in being in the music business. And how do you compete with Spotify????
Yes. Early on, artists viewed the reach of the Internet as exposure for their songs and brand, so they were open to giving away music in exchange for that opportunity.
so true. it’s obvious to even a new person just researching the circumstance, the fact of the government’s have allowed these dealings show they don’t care about anyone, just their pockets, it’s who ever donate the most gets what they want scheme, so they rule against what’s right and cause millions to suffer, all so they can profit, because most of them are corrupt, and the big industry is getting their way. i didn’t even see your comment and were on the same page in thought, and millions are as well, we need to renew the PRO’s fight to get fair pay, ASCAP was doing something, but they need support from the artist and people to show case how horrible what the governments and big industry is doing. their in the pockets of big corporations, and they got their foot on our necks.
How about all the people in the wine industry start giving away all their wines for free, then see how good the wines all taste next year?? There is a HUGE difference between PROFESSIONAL musicians and AMATEUR musicians! Hobbyists will NEVER come up with an album like ‘Dark side of the moon’ out of their bedrooms!
i don’t agree, your talented no what where or when. i know musicians that are making high end music that are not signed, the fact is they only sign you if you got talent. the system is rig to force people to go to them, so they can profit emencely. most people come up with the music before ever sign with a label, so the quality has nothing to do with if your with a label or not. but the fact is, they have caused a dam in the system or a funnel, so the only way to profit is through them, if you don’t use them you get no plays, because the people are now funneled your streaming companies only. it’s going to be harder or impossible to get sales, it’s going to be difficult to make your own streaming site. all though i think the PRO like ASCAP should make their own streaming platform and we recommend that people only use them to support the artist, this will make them want to pay fair. and we might not need them anyways. they made us have to find the right way for ourselves, instead of being fair with us. we have these two options, because not using them now leaves us with no one, and using them gets us little to nothing, and the governments are corrupt so they think they can get away with it. we need our own streaming platform that is marketed as the only one that is fair and benefits all involved especially the artist.
all though i think the PRO like ASCAP should make their own streaming platform and we recommend that people only use them to support the artist, this will make them want to pay fair. and we might not need them anyways. they made us have to find the right way for ourselves, instead of being fair with us. we have these two options, because not using them now leaves us with no one, and using them gets us little to nothing, and the governments are corrupt so they think they can get away with it. we need our own streaming platform that is marketed as the only one that is fair and benefits all involved especially the artist.
Here is the thing all of you have missed. You can’t just set an arbitrary rate per stream. All these services pay out 70% of their revenues as royalties. They take 70% of the revenue from Premium subscribers and divide that by the total number of streams from Premium subscribers. That’s why the rate changes each month. Spotify has the lowest rates because they are the most common/popular. Napster pays more because they have relatively fewer streams. But if all of a sudden, every Premium Napster subscriber would stream double the number of songs in a month, the rate would drop in half.
If you want a better per stream rate, you have to either limit the number of streams on the Premium accounts (not going to happen) or raise the price of a Premium subscription. In theory, if you were to raise the monthly cost to $15 for a Premium Spotify subscription, the per stream rate would increase 50%.
Rates on Spotify are also dragged down by the large number of ad-supported streams. The calculate those royalties the same way as Premium. 70% of ad revenue divided by the total number of ad-supported streams.
If you were to set an arbitrary rate of $.01 per stream on Spotify, then you’d have to charge Premium subscribers a rate of around $20 per month. But even then, the rate will change month to month. And you’d likely lose a lot of users.
Thank you breaking down the business model math.
TO ROG : Let’s save the music not the industry !