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| 2 minutes read

The Playlist: DLA Piper’s music law updates

#2: Dancing Stream - the impact of streaming on the music industry

Streaming currently accounts for more than half of the global music industry’s income, and in the UK specifically, it has brought in approximately GBP 1 billion in revenue via 114 billion music streams over the last twelve months. In recent years, the streaming business model has clearly been instrumental in rejuvenating the record industry, and has pivoted it back into growth after fifteen years of decline; with the ongoing COVID-19 pandemic shining new light on this debate. A particular issue for artists in the midst of the pandemic, is the loss of a key revenue stream due to the (almost) full closure of the live sector, although arguably the industry has been much more COVID-resistant because of the virtual nature of subscription streaming.

However, amidst the evident positives of these services, a question has emerged: is streaming fair to those artists that it professes to benefit? For example, it has been found that artists can be paid as little as 13% of the income generated. The difficulty then lies in how to balance this multi-faceted debate. The numerous stakeholders, including frontline artists, session musicians, record producers, songwriters, composers, record labels, music distributors and streaming services, all have a different, and sometimes conflicting, view on the issue and how to solve it. The issue in discussion here – whether artists are being undersold – is complex and is affected by a multitude of other issues including: the pricing of subscription streaming; the methodology employed in royalty calculations; the definition of a stream in copyright terms; national copyright law variations, amongst others.

As a result, the UK Government has announced an investigation into the economics of music streaming that will evaluate its impact on the various stakeholders involved through Parliament’s Digital, Culture, Media & Sport Select Committee. There are a number of key focuses of the inquiry, which include an analysis of the current dominant business models in the digital music market; the impact that the shift to streaming has had on the music industry at large (and artists and songwriters in particular); and also whether the UK should be looking to adopt some of the music-related copyright reforms contained in last year’s European Copyright Directive to protect the industry from knock-on effects, such as increased piracy of music. The inquiry follows a number of recent campaigns, which have argued that the dominant streaming business model has been developed to benefit the streaming platforms, the big music companies and/or the superstar artists to the detriment of the wider artist and songwriter community.

Potentially, without intervention, the disconnect between artists and the streaming platforms that seek to promote them, will only become more acute. This investigation seems to be a welcome move towards creating a more transparent, fair and equitable model going forward.


music, uk, music industry