London, 2nd December 2021 An open letter to Parliamentarians
This Friday, 3rd December, Labour MP Kevin Brennan brings to Parliament his Private Member’s Bill which he feels will address problems in the music streaming market. Kevin Brennan is a long-time member of the Musicians’ Union, and is close to campaigners who have called for changes to the way music streaming works.
But this very closeness to the coalface of music may have resulted in a Bill that could improve the outcomes for a few whilst inadvertently damaging the many. The Bill misses the fundamental point that we should be working together to build value in music for all stakeholders in a market that is still 50% down on its peak.
Despite its best efforts, this Bill will penalise those that can afford it least – the diverse artists in our culturally vibrant independent music community and entrepreneurs who lack the economies of scale of their multinational competitors.
The new world of streaming has enabled the rise of a more diverse, equitable and creative music ecosystem; with the independent community now the UK’s fastest growing music sector, generating 80% of new releases and worth 26% of the market. This allows independent artists like Arlo Parks and AJ Tracey to compete on their own terms and be heard alongside those benefitting from big corporate backing like never before.
But the positive changes brought about by streaming have not benefitted everyone. Some artists whose deals pre-date the ‘big bang’ of streaming are not participating fairly in its growth and this is an important example of the type of issue the industry needs to address head on.
In a world where 80% of streaming revenues go to just 1% of participants, the Bill does nothing to change the current concentration of wealth. The top 1% would get richer and the pool of investment for new artists would decrease. Bearing in mind that the UK streaming market already pays 66% of its revenues to ‘catalogue’ rather than new music, this substantially favours older artists – many of whom are actively campaigning for this change.
A key proposal in the Bill is a compensation mechanism called ‘equitable remuneration’. This sounds like it means ‘fair payment’, but it does not. Nor does it mean ‘a fair day’s pay for a fair day’s work’. It is a highly complex mechanism that risks costing many of those it claims to help far more than it will ever deliver.
An independent study published in September on Music Creators’ Earnings In The Digital Era, commissioned by the Intellectual Property Office, argued that “Confusion and misunderstanding characterise much of the public debate”. The authors stated that there is not sufficient evidence to support the measures Brennan’s Bill proposes.
A recent analysis intended to support this proposal by a well-known music industry accountant revealed that only a handful of artists, on the worst legacy deals, would stand to benefit. Reports from Spain, where a similar system exists, indicate that a few highly successful artists on legacy contracts benefit, but middle and lower-tier earners lose out.
We have called repeatedly for urgent analysis and data to properly assess the issues, to make streaming work better for a greater and more diverse range of participants, and a government process is currently underway to deliver just that. The Brennan Bill puts the legislative cart before the data horse and stands to set back improvements in diversity and representation in music by a decade. If it passes, the Brennan Bill risks hurting the very communities that most need help.
Paul Pacifico, CEO Association of Independent Music
About Paul Pacifico
Paul Pacifico is CEO of AIM, the Association of Independent Music which represents the UK’s community of music entrepreneurs; including independent labels, service companies and self-releasing artists amongst its 1000+ members.