The Great Escape 2015

TGE 2015: All parties need to be welcomed to the streaming debate, which may require a little background information

By | Published on Monday 30 March 2015

Chris Cooke

CMU Business Editor Chris Cooke on the CMU Insights conference strand Music Licensing: Explained At Last! due to take place at The Great Escape this May.

At last year’s Great Escape, Dan Le Sac talked through a survey we had done of some key players in the UK artist community about developments in the digital sector; the poll coming, of course, after some high profile artists in Europe had hit out at the market leading streaming service Spotify and it royalties it pays. Though in our survey, artists were actually pretty positive about streaming, including the freemium element of Spotify which has since proven controversial in various quarters.

But a key theme running throughout was that artists felt decidedly uninformed about how labels and publishers were licensing these platforms, how royalties were being calculated, and what happened to the money once the DSPs had paid the rights owners. Many felt that they had been too often left out of discussions about the future of digital music.

And a year on – as we hear that the majors are now having second thoughts about Spotify-style freemium – the artists and songwriters I speak to likewise feel that they are being frozen out of a debate that affects their future livelihoods a whole load more than major label execs and shareholders, who can always shift into other industries if they make the wrong decisions today.

I think one of the key problems is that many people working in record labels and music publishers don’t really understand how streaming services are licensed either, which means that the execs that artists and songwriters have day-to-day relationships with struggle to explain how things are working and why per-play figures are imprecise and so low (they are averages, and only make sense if you appreciate that to survive, the streaming services need to ultimately serve up billions of tracks a day).

This is all understandable because the way streaming services are licensed is a long way from traditional music retail, it’s confused by labels putting short-term risk management measures into the deals, and probably requires a little knowledge about how copyright works to make sense.

Ultimately artists and songwriters don’t need to know the minute details, and the basic rule is quite simple: to succeed you need people to spend more of their time online streaming your tracks. But when an industry is in flux, all stakeholders should take part in the debate, and that means that at this stage all parties should know a little more about what is going on.

Which brings us to Music Licensing: Explained At Last!, the second of four CMU Insights strands taking place at The Great Escape this year to have its line-up published. Over this one-day strand we will explain – for artists and songwriters, producers and managers, labels and publishers, licensees, and anyone else who needs to know – how music licensing works across the board, and where the money is being made, from physical sales and sync, to public performance and broadcast income, to the various types of digital services.

And then – with reps from the record industry, music publishing and the legal profession on board – we will explain how digital platforms are being licensed, how royalties are calculated, and what happens to the money once the DSPs have paid the rights owners.

Which will take us to what I see as the biggest digital debate of 2015 – yes, even bigger than the freemium debate! How should streaming income be split between the different stakeholders: labels, artists, publishers and songwriters.

We know that labels take the majority of the streaming income, in much the same way they do with CD sales, the record companies being the primary investors in new talent and funders of new content, ie the risk takers. But are the risks as high in the streaming age? And aren’t many labels now spreading that risk by taking a cut of other artist revenue streams too?

The songwriting community has become particularly vocal on this issue in recent months, and I’m really pleased that the CEO of the British Academy Of Songwriters, Composers & Authors – Vick Bain – has agreed to lead this discussion at TGE in May.

But all sides will be represented as we consider all the arguments and, perhaps more importantly, beyond The Great Escape stage, what is the best forum where this debate can take place day-to-day, so that all voices are heard, but the music industry doesn’t have to fight its internal battles too much in the public eye.

For more information on ‘Music Licensing: Explained At Last!’ click here, and don’t forget, this is just one of four strands presented by CMU Insights at The Great Escape this year. To get access to all four, plus all the other elements of The Great Escape this May, get yourself a delegates pass here.