Last month the UK government published a new Transparency Code for music streaming, in which digital service providers, record labels, music distributors, music publishers and collecting societies commit to communicate more information to artists, songwriters and their managers about how their music is used by streaming platforms and how digital royalties are calculated.
The code was facilitated by the Intellectual Property Office as part of the Economics Of Streaming work that was instigated by government following the Parliamentary inquiry into the digital music sector. Trade organisations from across the UK industry were involved in negotiating the code, including BPI, which represents the UK’s recorded music industry.
Here, its Chief Strategy Officer Sophie Jones discusses the code and what comes next.
The Code Of Good Practice On Transparency has been a long haul, navigated through choppy waters at times. And so it has become known fondly amongst the BPI team as the ‘Cape Of Good Hope.’
The Cape Of Good Hope isn’t where most people think it is. It isn’t the southern tip of Africa. It is a waypoint en route to get there – a rocky headland where the hard work really begins. The code too is a waypoint.
It sets out minimum requirements for companies to be clear with creators about artist contracts, supply chain information, royalty reporting and payment, audits, deals with digital service providers, and who to contact if they have queries.
The code is an excellent document that shows what can be achieved when all parts of the music sector engage in good faith with one another. It will guide companies – DSPs, record companies and labels, music publishers, and distributors – as to how they can communicate more effectively with the artists and writers they work with.
But its ultimate aim is to stimulate these companies to do more to help the creative community understand the changing industry landscape and how they are paid.
So, its real value lies in what we decide to do with it now that it has been agreed - and the insight and creativity that label teams, and PR and marketing colleagues, can bring to this challenge to bring the code’s requirements to life and make a meaningful difference to levels of trust and understanding across the business.
The code is also a signal to trade bodies representing different groups in the industry to talk more, listen more, and take time to understand others’ perspectives. Intense discussions during the negotiation of the code have already deepened the understanding of different positions.
Those conversations, chaired by government, will continue over the next two years as the code is implemented and eventually reviewed. We also have a forum for discussion in UK Music which can effectively convene the various parts of the industry. We all have more in common than not.
But in all this let’s also acknowledge, as the code does, that some conversations need to be private. For example, label executives need to be able to negotiate tooth and nail to get the very best deals they can with current and future digital partners.
This cannot happen by committee or in open fora because that is not how to get the best outcome. In any commercial negotiation, too much information being shared would almost certainly have a low tide-effect, and lower all boats, not to mention risking breaches of competition law. This is perhaps frustrating to hear - but it is true.
There is much that can and is already being done to improve communication and transparency where possible. A number of labels have created sophisticated royalty portals which give detailed breakdowns of an artist’s royalties, by track, service, market and time period - as well as overviews, visual infographics and cash-out features.
Uptake of these portals remains too low and more needs to be done to promote them. Many labels regularly hold meetings for the representatives of their signed artists to present these tools along with market trends and to listen to concerns.
As we look to the future, several labels are involving artists on their roster in creating and testing experimental models that may shape the future of the industry, including some using AI. The code is an invitation to do more of this and more in general to communicate better and build trust back into our industry dialogue.
