Feb 9, 2024 5 min read

MMF CEO Annabella Coldrick on the new streaming transparency code

CMU invited representatives from three of the UK music industry organisations involved in negotiating the new streaming transparency code to give their perspectives on where it fits in and what should happen next. Here we get the MMF perspective from its CEO Annabella Coldrick.

MMF CEO Annabella Coldrick on the new streaming transparency code

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 the Music Managers Forum, which worked closely with other members of the Council Of Music Makers.  

Here, its CEO Annabella Coldrick discusses the code and what the industry needs to do now to ensure it achieves its objectives. 

A push for greater transparency has been at the heart of the MMF’s Dissecting The Digital Dollar (DDD) initiative since 2015. 

Researched and written by CMU, it aimed  to explain to artists and managers how music streaming services were licensed, and how subscription and advertising revenues were shared between artists, labels and the wider music community. 

At that period, the industry was in the midst of a seismic shift away from the unit-based consumption of CD and download sales - the metrics on which most artist and music-maker contracts were constructed.  

The “label-centric” pro-rata streaming model that replaced it rewarded “market share”, and allowed the most powerful rightsholders to ‘maximise’ the value of their catalogues by demanding large upfront advances and equity in the new digital platforms. 

Arguably streaming saved the music industry. By 2022, global recorded revenues had practically doubled from their 2014 lowpoint, reaching $26.2 billion. Streaming had revolutionised the business, revealing untapped global markets previously considered lost to piracy. 

However, while the biggest labels prospered, music managers and their clients were often left in confusion, with little insight as to how these new models were structured, or the basis on which artists were being paid. 

Having raised a series of questions in the first two editions of DDD, the MMF worked methodically to produce a series of further publications - issuing Transparency and Deals Guides in 2017, a Song Royalties Guide in 2019, and Song Royalties Manifesto in 2022 - highlighting the ongoing challenges faced by artists and music-makers, while empowering their managers to ask better questions of their business partners, and to advocate for fairer and more equitable practices. 

More recently, of course, the gross inequalities of streaming were highlighted in the full glare of Parliament by the Culture Media & Sport Select Committee. 

It was their 2021 report on the Economics Of Music Streaming that recommended a “complete reset” of the market, and led directly to an ongoing work programme at the Intellectual Property Office. 

The initial fruits of this work were the publication of a pan-industry code on Metadata in May 2023 and last month’s Voluntary Code Of Good Practice On Transparency In Music Streaming, which drew significantly on the Digital Dollar research and recommendations. 

Both should be welcomed as potential first steps to reform; albeit, as the Council Of Music Makers highlighted on 31 Jan, in many ways the endemic lack of transparency first identified in DDD appears to be getting worse, not better.  

In the past year, in an attempt to protect their market dominance, major labels have been embarking upon their own unilateral modifications to the pro-rata model by experimenting with different payment models on varying platforms, including Apple Music, Deezer and Spotify. 

This is resulting in new payment thresholds and spatial audio uplifts, all determined without any consultation with music-makers or their representatives. 

Despite wider market trends, the decisions impacting music’s future are still too frequently made in private, behind locked boardroom doors. The waters are getting murkier, not clearer. Will the Transparency Code change that situation? Probably not. However, it does lay the groundwork for change.  

Signed by all key UK music trade organisations, as well as PPL and PRS, and the streaming services - via their trade body, ERA - it comes into force in six months time. The code at least provides a framework for improved processes in the following key areas: contracts, supply chains, royalties, audits, DSP licence agreements and communications. 

Its stated aim is to create a “race to the top on transparency”. To agree standards of good practice, to deliver and maintain those standards and to rebuild trust - allowing creators to better understand how their music is being licensed, administered and used, and to provide clarity that they are being paid correctly. 

Importantly, it will provide managers and other stakeholders with a basis to request transparency - whether for more timely or detailed royalty accounting, or a greater understanding of constantly evolving deal terms. From August 2024, it also puts in place a mechanism where trade bodies - such as the MMF - can report and escalate market dysfunctions and collate evidence. 

The CMM will be running a free webinar on the code and its implications on 19 Feb. 

However, the key word here is “voluntary”. 

Government ministers announced the code in a blaze of positivity, but it will only amount to anything if all parties - whether that’s music-makers, their business partners, their collecting societies and the DSPs - play ball and fully embrace its potential. 

We need participation, not lip service. And if we don’t get participation, then we may need legislation. 

It is also important to remember that transparency is a means to an end, not an end in itself. Secrecy builds suspicion and transparency can help build trust - provided it demonstrates the payments are not only correct, but also fair. 

If not, then transparency is a way to expose failings, raise questions and challenge problems. It is for this reason the code has met so much resistance from different entrenched interests in the industry who benefit from the opaque NDAs embedded into the music supply chain. 

During the EU Copyright Directive’s painful negotiations, there was much talk of the transparency triangle, comprising not only the right to information (the transparency) but also a mechanism to address the issues it unveils (via contract adjustment/rights reversion) backed by accessible dispute resolution. The UK Transparency Code is one part of the puzzle - or edge of a triangle - but the remuneration discussion needs to follow for the code to have teeth and be worth the paper it’s written on.

Alongside other members of the CMM, the MMF is desperate to champion and applaud examples of good practice. The majority of our members continue to enjoy fruitful relationships with record labels, music publishers, collecting societies and digital music services. 

However, as the nature of those relationships evolve, we need to ensure that artists, music-makers and managers can become true stakeholders. That’s why transparency continues to be of paramount importance. The future of our business should no longer be dictated from above.

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