IMPALA has published a new plan to transform the digital music market, organising the many issues that have been raised in recent years with the streaming business model, and digital music more generally, into five categories, each with a stated objective.
First, the industry should look to “increase revenues and share them fairly”. Second, it should “supercharge support for new, emerging and diverse music”. Third, it should “establish trust through industry-wide provenance labelling”. Fourth, it should “stop fraud and AI dilution”. And finally it should “reduce climate impact”.
The new plan comes as the music streaming market approaches a billion premium subscribers, which - IMPALA says - is a “something to celebrate”, but also an opportunity to put the spotlight on issues which, if addressed, could result in a “larger, fairer, more diverse and transparent” digital music market.
Among other things, the plan hits out at the monetisation thresholds introduced by streaming services under pressure from the majors, calling those thresholds “fundamentally unfair” and adding that they “must be removed”.
Instead of freezing grassroots artists out of the royalty pool, it says, streaming services should review pricing and the role of free tiers, while also considering some of the alternative royalty allocation models that have been proposed in the past but never really tested.
When it comes to curation and discovery, IMPALA’s plan says the bigger streaming services should ensure they have local editorial expertise in every market where they operate, including the smaller European markets. And the industry at large should embrace a ‘provenance’ framework that would employ labelling to help “identify, promote and celebrate genuine music in a sea of content”.
Launching the new plan, Mark Kitcatt of Everlasting Popstock - who co-chair’s IMPALA’s streaming reform working group - says, “Our members believe that the promise of digital music is connection between artists and fans, and our proposals aim to strengthen this. At the same time, we question the impact of certain measures on the health of the market, such as monetisation thresholds and the scope of free-tier offerings, as well as current pricing”.
IMPALA’s Executive Chair Helen Smith adds that, if the industry can achieve what is set out in the plan, “connections with fans will be stronger and more working artists and labels at different levels in the ecosystem will be able to make a living from their art”, and “the music economy will offer greater and more sustainable opportunities”.
IMPALA, the pan-European organisation for the independent music sector, has previously published two versions of a ten-step plan to “make the most of streaming”. Many of the proposals in that earlier plan are referenced in the new document.
That includes proposals for changing the way streaming services allocate money to individual tracks. Currently a service pools all of its income in any one market and then allocates a share of that money to each track based on what percentage of overall listening it accounted for. There are various issues with that approach and various changes have been proposed over the years.
That includes taking a track’s length into account when allocating money, because under the current system artists or genres that release longer-than-average tracks are penalised. Another alternative model previously proposed by IMPALA would see a slightly lower allocation per track for the most streamed music, with the money saved then redistributed to other tracks.
Under pressure from the majors, some streaming services - including Spotify, Amazon and Deezer - basically introduced the opposite to that system by setting thresholds under which tracks are allocated nothing at all, so that money is taken away from grassroots artists and labels to favour more successful artists and labels.
Universal in particular likes to call that system of penalising grassroots artists the ‘artist centric’ approach to royalty allocation, even though millions of artists actually lose out.
IMPALA opposes the thresholds and reckons the other alternative approaches should be considered again. It says, “monetisation thresholds based on number of plays or listeners are fundamentally unfair and must be removed”, adding “music that is streamed should be remunerated”.
Experimenting with alternative royalty allocation models that do not freeze out grassroots artists, IMPALA adds, would be “an opportunity for streaming services to differentiate themselves”.
Expanding on what those experiments might include, it suggests “mechanisms such as payment boosts for new releases, diverse repertoire, emerging local artists, independent music, and so on”. It then adds, “we encourage services to compete openly in this area and communicate their intent”.
Explaining what is meant by a provenance framework, IMPALA says “provenance in music means identifying different categories of content, including artists signed to a record label (whether independently or major owned), self-released artists, library material, AI-generated content and more”.
There is “an opportunity for the whole ecosystem to embrace provenance with pride”, it adds, in a way that would support “user choice and filtering”, and “improve discoverability and connections with fans”.