In 2020, the Department for Culture, Media and Sport of the United Kingdom (DCMS) opened an inquiry into the economics of music streaming. During that process, several issues with the current business model for songwriters and artists were identified by the committee. After completing the inquiry, the DCMS released a report through which they called for a ‘complete reset’ of the streaming business. 

In response to this, the UK government and a few other important players in the British music field have been taking steps to provide more transparency and inclusivity to the industry, as well as to remedy some other pressing issues – like the current state of streaming metadata. Three streams of work were prompted by the UK government’s Intellectual Property Office (IPO) to look for solutions around transparency, data and remuneration, while the Competition & Markets Authority focused on launching a study of the music streaming market.

The DCMS inquiry was in large part driven by many issues that came to light during the height of the Covid-19 pandemic. With quarantine restrictions and no live events taking place, many musicians and songwriters had to heavily rely on streaming income to make a living, which is often the smallest share of revenue that these artists get paid. This raised questions around the fairness of the current shares, not only between streaming platforms and artists, but also between recording and composition rights. 

Most of the time, the biggest share of revenue goes to the label side. This is partly believed to be due to historical reasons, since before the surge of streaming services labels had to deal with many material costs when issuing physical records, which were of course very expensive at the time. Though those costs don’t constitute as large of a percentage as they used to when it comes to expenses, labels argue that now they have to worry about other elements, such as marketing, that are just as expensive and important to their work. 

While about 55% of streaming revenue goes to labels, about 20% of that value – more or less, depending on the agreement – tends to go to the artists. Meanwhile, only around 10-15% of revenue is paid out to composition rights holders, such as publishers. To put it simply, recording rights tend to earn about 4x more than composition rights, which has raised many discussions over the past few years on whether or not this is a fair split.

As a way of promoting fair pay for musicians, the UK government announced in June of this year the creation of a music maker remuneration working group, formed by representatives and experts from across the music industry. The group is focused on the research and development of actions to support existing and future music creators in receiving fair remuneration in the context of the globally competitive industry that music currently is. 

Sir John Whittingdale, Minister of State at the DCMS, in a letter to Dame Caroline Dinenage, Chair of DCMS, acknowledged that, although lately recording contracts have been adding increasingly creator-friendly terms, many artists are still concerned about how they are paid for streaming. The Minister stated that these terms often are not extended to creators who are still under older contracts; “many of whom are paid at substantially lower royalty rates than their modern counterparts. Additionally, session musicians feel that they are not sharing equitably in the successes of the streaming sector.”

In response, Dinenage said: “The creation of a working group we have been calling for is a welcome step towards addressing the frustrations of musicians and songwriters whose pay falls far short of a fair level given their central role in the success of the music streaming industry.”

Something that also plays a big role in ensuring fair payment is metadata. With the current state of it, however, sometimes it’s difficult to even track the proper rights holders who are supposed to be compensated for the usage of a certain composition or recording. High quality and accessible metadata is essential to guarantee the accurate accreditation and payment of rightsholders, which is why the UK government announced the UK Industry Agreement on Music Metadata.

One of the main issues that this agreement seeks to address is the lack of standard when it comes to delivering metadata to streaming platforms. Because there are no guidelines, a lot of recordings are delivered with missing data points, which makes life quite a bit more difficult down the line, when the time comes for the platforms to properly pay rights holders. One of the most common missing bits of data are ISWCs (International Standard Work Code), which are unique identifiers for musical compositions. This leads to many delays and not a lot of accuracy, particularly when it comes to compensating songwriters.

With this metadata agreement, players across the music streaming industry are signing a voluntary commitment to constantly and progressively improve their metadata, and to ensure that an established core data set is associated with every single new recording. Furthermore, they are also agreeing to establish and support working groups of experts on education and technical solutions, as well as to follow and promote good practice in the music industry. 

This agreement is hopefully a step in the right direction to make sure that rights holders and streaming services get their hands on accurate and clean data, facilitating remuneration in the industry across the board.

The issue of transparency has been a hot topic of discussion within the industry for a while now, from many different angles. When it comes to streaming, some of the main concerns are regarding transparency of the business models themselves, especially when there are so many platforms that use music in many different ways – think Spotify versus TikTok, for instance; of the agreements involving revenue shares and of the algorithms used by streaming platforms to categorize and recommend music.  

Artists, songwriters and their representatives are largely concerned about the fact that terms relating to revenue share agreements are normally hidden from them, as well as most minimum guarantees set on licensing deals, due to non-disclosure agreements. These are even hidden from artists’ accountants at times, which means they have no accurate way of auditing their client’s royalties a lot of the time. As for the lack of transparency around algorithms, there is the burning question of whether or not these algorithms tend to prioritize certain genres or artists, or even if they can be influenced or manipulated by labels and artists themselves at all. 

Finally, there is the matter of monetary transparency. There is currently little to no information available to music industry workers relating to salaries at the moment. This particular issue might be about to change for the better, though.

A new project was announced in the UK by Christine Osazuwa, chief strategy officer at Shoobs and founder of Measure of Music, in the form of an anonymous survey. The questionnaire aims to collect information around salaries of full-time executive roles in the UK music industry, although also open to execs in other countries in case they desire to take part, as well. 

Osazuwa founded the transparency project along with a group of her peers. She wrote on LinkedIn: “A few weeks ago, I got together with a few other execs to discuss concrete and actionable ways to help the industry given the lack of a union for music execs. Top of that list was salary transparency. We all believed it was time to make money conversations more open and honest.”

The results from this survey are already being shared, both in the form of graphs and Google Sheets, hopefully creating a useful dataset to assist in the conversation around salaries and transparency and steering it in the best direction. 

More recently, there has also been a lot of discussion around intellectual property and Artificial Intelligence. The main concern has been around data mining by AI, specifically around the mining of private intellectual property for profit without sharing any revenue with the original creators. 

The UK government’s plan, which the MPs are urging them to drop, is to exempt text and data mining by AI from copyright protection, which was proposed by the IPO in June of last year. The DCMS, however, recently warned in their second connected technology report that this shows little understanding of the needs of the creative industries in the UK. They also point out that this plan is reductive to the arts and to cultural production, placing them as mere ‘inputs’ in AI development. 

The current framework, which is the one supported by the DCMS, provides exemption only in cases where the text and data mining are done for non-commercial research purposes, otherwise allowing creators to license their work for any other purposes. The committee believes this model ensures compromise and balance between creator rights and innovation. 

Furthermore, the DCMS also calls on support from the government when it comes to efforts from the creative industries themselves to push boundaries of creative technologies. ABBA Voyage was provided as an example of artistic companies embracing technology and innovation in order to create captivating cultural experiences. 

Finally, the Committee also notes that there must be urgent action to ensure that artists and creatives are rightfully and effectively protected against misuse of their likeness and performances in the age of rapidly developing technologies such as generative AI. 

There is still a long way to go until all of these matters around transparency, fair pay and metadata can be fully taken care of – if they ever will be. The fact that these conversations are currently happening and that all of the measures mentioned above are being taken, however, seem pretty promising for the future of the British music industry.