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Economics Of Streaming Perspectives: Music Managers Forum
By CMU Editorial | Published on Thursday 1 June 2023
Following the announcements this week about the ongoing UK government-led economics of music streaming work, we spoke to representatives from some of the organisations involved in that work to get their perspectives on what has been achieved so far and what should happen next.
This time Annabella Coldrick, CEO of the Music Managers Forum. The MMF is the UK trade body for music managers, which includes people managing artists, songwriters and producers.
What do you think have been the most important aspects of the IPO led projects that were instigated after the select committee inquiry?
All three areas of work are important – transparency, data and remuneration – but the ultimate focus has to be on the fair remuneration of artists and other music-makers.
It’s a long journey but we’ve finally got to the government agreeing to convene a working group on remuneration, which sounds really boring but which is actually a landmark move. This is the UK government overseeing an industry discussion around fair pay to try to reach an agreement.
For context, I actually think that the IPO research report on contract adjustment and rights reversion is really fascinating – mostly because it puts the conversations we’ve been having in the UK into perspective and highlights how so many countries around the world have already attempted to deal with the tricky questions around the imbalance of negotiating power between creators, music makers and artists and the big companies that they’re signed to.
The report shows beyond doubt that the measures being called for by the creator groups in the UK are not unreasonable. These issues are being looked at everywhere, and they’re being addressed by different countries in different ways. Ultimately, it also demonstrates not only that legislation can be used effectively to help address dysfunctions in the streaming market, but also – for instance, in France – that it is possible to have industry-wide agreements.
What do you think should be the priorities of the music-maker remuneration working group that is now being convened?
The priority is having a full and open discussion about addressing the imbalance for those artists who are contributing to the bulk of music streaming’s value through their catalogue, while being paid outdated royalty rates.
Even those artists currently receiving a label royalty of 15% – well above the 20th Century rates – are still being paid significantly below the ‘modern’ average of 26% that the labels confirmed to the select committee. That situation urgently needs to be resolved, especially at this current moment when label profits are increasing substantially.
It’s also vital that we think about the future, and what comes after streaming. We all know that new forms of exploitation, like AI, are coming down the track, and it’s really important that the mechanisms are in place to adjust and revise contracts around future technological change.
For instance, in Germany, it used to be that any form of new exploitation was not allowed to be included or bolted on to existing contracts. In 2008, that was replaced with new measures where the exploitation of ‘unknown types of use’ have to be agreed in writing in advance, with creators being notified three months ahead of those uses being exploited and given the opportunity to revoke those rights. That’s really fascinating, and potentially allows creators and music makers to better realise the value of their rights when new technologies emerge.
It’s crucial we can future-proof any outcomes from the working group, and there’s a real opportunity here for the music industry to strike an agreement that aligns all of our interests and shares fairly in the wealth. If you can do a great deal for a new artist based on 26% of revenue, then why can’t you also adjust rates for the catalogue that’s driving most of the value?
The IPO has already undertaken research on the three copyright reforms proposed by the select committee – ie reversion rights, contract adjustment rights and performer ER. What is your current position on those proposals?
As we outlined in the white paper that the MMF published with the FAC back in 2021, we feel that all three of these proposals are important and should remain on the table.
Reversion is probably the reform we feel strongest about which could ensure a modern competitive market and future proof any deals – such as the 35 year rule in the US. Fascinatingly we used to have rights reversion in the UK until the 1950s.
There remains questions about how it could be implemented retrospectively, and in some countries reversion often really acts as a kind of contract adjustment. In the US, for instance, many artists use this as an opportunity to enter into updated deals and reevaluate the terms on which they’re paid.
Ideally we’d like to see some kind of contract adjustment with collective bargaining to ensure fair baseline terms as mentioned in the EU copyright directive. And in the absence of any other solutions we think that ER could provide a mechanism to ensure that every music maker who contributed to a recording gets paid something – without it going against recoupment. So that should also remain on the table.
Again, it’s really worth taking the time to read the research report, and take confidence in the fact that many other countries, including the US and across the EU, have recognised the need to introduce interventions in order to make the recorded market function better. As I say, even the UK had a reversion right prior to 1956! These are not alien concepts, they are commonplace in much of the rest of the world!
There has been a lot of discussion of late about reforming the way streaming monies are allocated to individual tracks and catalogues. What are your thoughts on those discussions?
The MMF has been supportive of the principle of user-centric model for many years on the principle that what the fan pays should go to the artists the fan actually listens to, not a bigger pot.
We think that fraud is a huge concern, and we are also really intrigued by the CMA’s findings that there’s already a major imbalance with how revenue is allocated to different rights holders. That issue needs to be discussed in a lot more detail.
Also, while it’s great that major labels are now committed to changing how revenue is distributed and are willing to explore new models, it’s vital that all music-makers and their representatives are included in those conversations.
This is not the time for unilateral solutions. We need proper discussions about how to tackle fraud or the challenges of 120,000 tracks being uploaded to DSPs every day. Those discussions can’t just be led by the major rights holders.
How do you think the undertakings in the metadata code will impact on the way streaming services work and music-makers get paid?
In the short term, they won’t. In our Song Royalties Manifesto, the MMF put forward the long-term proposal that song metadata and publishing ownership needs to become a mandatory part of uploading music.
By doing that in the longer term you could potentially flip the system, and allow streaming services to pay the publishers and collecting societies on a monthly basis, rather than the cumbersome matching process we’re stuck with, because they would know who owns what work.
That’s still our ultimate goal, however these initial undertakings are a really important first step along that road. The MMF were once called mad for suggesting that recordings should only be released when the songwriter data was embedded, but we’re now seeing organisations like CISAC calling for the same thing – so it feels that this idea has traction and we’re now moving down that road to progress.
The management community is definitely up for taking their share of responsibility in getting this to happen and we feel that everyone should pull together to establish some proper tangible change.
How can your members help ensure the metadata code has the maximum impact? What measures would you encourage them to implement?
The MMF has been consulting really actively with our members all the way through this process.
We’ve held separate sessions with producer and songwriter managers, as well as with artist managers, and we need to ensure that the ‘speed up’ process that CISAC is promising to make the ISWC codes easily available actually happens, and that labels proactively ask managers to provide this information so that they can work with publishers and societies to get the codes issued.
Our members will do everything they can to make sure the code has the maximum impact, providing everyone else in the system is doing what they can to support change and speed things up.
How can other stakeholders in the music community ensure that the metadata code has the maximum impact? What measures would you encourage them to implement?
We need KPIs – so key performance indicators – to measure and incentivise progress. We need to be able to ensure that these measures, when implemented, are actually making a difference.
Everyone has signed this code on trust, without having those KPIs in place, but it’s absolutely critical that we are able to know how many recordings are being uploaded with the full and accurate song data attached, and we’re able to measure the impact. We also need to measure what impact that has on the matching process, and then what that does to the size of the black box and the volume of unmatched repertoire.
It’s absolutely key that we get these KPI’s established in the next six months, so we’re not just making changes without the knowledge or understanding of their impact. For that to happen, we need the streaming services, the publishers and the collection societies to agree to share this headline information.
