Culture, Media and Sport hears calls for equitable pay for musicians
|
The Culture, Media and Sport Select Committee today held its first
hearing on the economics of music streaming. The first panel of
witnesses was: Tom Frederikse, Partner at Clinton Solicitors Tom
Gray, Musician and Founder of Broken Record Campaign Colin Young,
Streaming Auditor and Accountant at C.C. Young and Co. Committee
chairman Julian Knight, Conservative MP for Solihull, opened the
session with questions about the pay received by artists. Tom Gray
said...Request free trial
The Culture, Media and Sport Select Committee today held its first hearing on the economics of music streaming. The first panel of witnesses was:
Committee chairman Julian Knight, Conservative MP for Solihull, opened the session with questions about the pay received by artists. Tom Gray said the distribution of revenues between platforms and artists was not fair. A fully independent artist could do well with streaming, but most artists worked with labels, where deals were 80-20 in favour of the labels. Artists were hugely disadvantaged by the structure of royalty arrangements. Colin Young said commercial deals negotiated were historically based on what happened in the physical world and hadn't improved in the digital world. Artists generally received 20% of income, but out of that had to pay 100% of the costs. Tom Frederikse said the heart of artists' complaints was that it was cheaper to produce music digitally, but the distribution of profits still favoured record labels in the same way as when there were only physical sales. But contracts were private. The suggestion was that the committee should recommend to the government that the most likely route to success was to expand the role of PPL in streaming, also known as equitable remuneration - whereby the label side of streaming money was collected by PPL and distributed between the rights holders and creators in a pre-determined way. Kevin Brennan, Labour MP for Cardiff West, asked for more information about the Broken Record Campaign. Tom Gray said a rebalancing of incomes towards artists would result in money flowing into UK plc. It was necessary to protect the talent pipeline and artists on modest incomes. He explained that equitable remuneration (ER) meant equal pay for equal work. Money paid to PPL should be split 50-50 between artists and labels. There were existing algorithmic 'radio' services which provided one-to-one services and were based on ER. The problem was that the big labels would not allow ER into streaming. He agreed with record companies that streaming was not broadcasting. But talk of breaking international treaties sounded like scaremongering. Tom Gray explained to Steve Brine, Conservative MP for Winchester, the differences between the big three record companies and independent labels, which were fairer to artists. In a nutshell, he said the labels were making massive profits while most artists earned very little. Tom Frederikse said it was not suggested that the government should step in and change standard contracts that had been defined over many years. Instead, artists should somehow have some counter to the recruitment and trickle-down problem through collective licensing of some elements. Damian Hinds, Conservative MP for East Hampshire, asked about the costs of producing and listening to music. Tom Gray pointed out that although the Internet was supposed to provide unlimited freedom to listen to anything, in fact algorithms used tended to focus on a small number of artists.
Damien Green asked if there was a difference between the
streaming services. Tom Frederikse said the difference was
between the primarily subscription services and those like
YouTube that had user-generated content. Tom Gray noted that from
an artist's view there was little difference. He said we were in
'choppy waters' when it came to how music was 'put onto the top
shelf.' Heather Wheeler, Conservative MP for South Derbyshire asked about the unique issues surrounding YouTube and TikTok. Tom Gray said if YouTube was a music company it would be broken up for being a monopoly. "The continuation of Safe Harbour is an obscenity," he said. Julie Elliot, Labour MP for Sunderland Central, was shocked at some of the evidence given. She asked about how payment was made to artists. Tom Frederikse explained that streaming service did not pay artists at all. Payments were only made to intermediaries, labels, publishers or aggregators. It would be too chaotic to have too many participants in negotiations. Tom Gray agreed with the MP that it would be hugely beneficial if artists had some representation in discussions. But Tom Frederikse was not certain there was much to be gained because the intermediaries and the creators had mostly converged interests. They all wanted as much out of the streaming services as they could get. John Nicolson, Scottish National Party MP for Ochil and South Perthshire, was also shocked to hear about the unfairness of contracts, not least that artists in the streaming era were still being charged 10% for broken records. Tom Gray agreed that user-centric models would help distribute revenue from streaming more fairly. But that was a contractual issue and not something the government could get involved in. Regarding the effect of Brexit, Colin Young said being in Europe had transformed the incomes of live performers. Any obstacles would be bad for them. Tom Gray pointed out that the Musicians' Union was calling for creative passports, but it was not considered a priority. If we had a system of carnets, as they had in Switzerland, it would be "pretty devastating." He hoped it would not come to that, but agreed with Mr Nicolson that "we are heading for a cliff edge." Regarding the European Copyright Directive, he said it would make a big difference to artists if royalties from YouTube could be brought into line with Spotify. Colin Young was not aware of any discussions having taken place between the UK government and the industry. The second panel comprised:
Questions focussed on the financial problems faced by modern-day musicians. Ed O'Brien and and Guy Garvey both said they had done well financially, Nadine Shah said she had struggled, despite her success as a solo artist. She commented that most artists did not understand the intricacies of contracts and relied on trust in their management. Guy Garvey said unless musicians were equitably paid, it would be impossible for them to pay their rent. The current situation was "threatening the future of music." Replying to Alex Davies-Jones, Labour MP for Pontypridd and a member of the Musicians' Union, Ed O'Brien said streaming services had had a positive impact on the music industry. In the past, illegal file-sharing had been a major issue, but Spotify's freemium model largely overcame that. All that was needed now was some parity and fairness in the system. Streaming had saved the industry from piracy, but that did not help young musicians who could not pay their way. Julie Elliot asked Nadine Shah about what it was like to break through in the digital age and what advice she had received. She replied that the new way of working was very different. There were some who used social media to their benefit, but she was not like that. She did have legal advice when she signed contracts, but the landscape was changing and not working. Guy Garvey thought the user-centric model would be very valuable. And there needed to be more transparency to provide equitable remuneration. Ed O'Brien agreed with Damien Green that established artists benefited more from digital because they appeared on playlists. Nadine Shah said there were "dark powers at play" regarding the relationships that some artists had with their labels. Without wanting to go into too much detail, she was now "acutely aware" of her digital deal with her label, "but only because of this conversation in the past week and a half." Replying to Kevin Brennan's question about Spotify's "tip jar", she said it was "insanely condescending; an admission that artists were not making enough money. She told John Nicolson some musicians did not want to speak out for fear of retribution from record companies. She did not want to be in a fight with labels or streaming services, which she loved and to which she was grateful. But she worried for artists who were not being paid enough. She said the committee's enquiry was itself giving her hope for the future. She repeated the hope that the committee would recommend fair remuneration. She was all for the user-centric model. She found the prospect of Brexit "terrifying" as the majority of her income was from touring Europe. Ed O'Brien agreed that the UK seemed to be totally unprepared for what was to come. Guy Garvey said it was "devastatingly insulting" for Apple to say the main reason for providing music was to drive users to buy Apple hardware. |