Two members of US Congress have proposed a Living Wage For Musicians Act which would basically introduce performer equitable remuneration on streaming, but funded by a levy applied to streaming subscriptions. And a pretty significant levy at that - 50% of the current subscription fee.
"The popularity of streaming services has forever changed how people consume music and upended the economics of the industry in the process, creating a system of winners and losers that under compensates tens of thousands of recording artists and musicians for their art and labour", says an official statement from the Congress members proposing the act, Rashida Tlaib and Jamaal Bowman, who respectively represent Detroit and New York.
“Streaming services wouldn’t exist without the brilliant work of artists who choose to share their music with these platforms”, adds Bowman. "Artists and musicians across the country deserve to be paid for their work. I represent the Bronx, the birthplace of hip hop, where music is the foundation of our communities. They all deserve to be paid fairly for their incredible and transformative art".
Under the proposals, the act explains, each streaming service would charge each subscriber “an additional fee in an amount equal to 50% of the subscription fee charged by the service provider, except that such additional fee shall not be an amount less than $4 or more than $10".
The service would then pay the money generated by that levy - plus 10% of its non-subscription revenues - to a new entity that would be called the Artist Compensation Royalty Fund. That Fund would then make payments directly to performers, with 90% of monies flowing to the main artists on each track, and 10% flowing through to session musicians.
Music streaming is a revenue share business, with streaming services sharing their revenues with record companies, music distributors, music publishers and collecting societies, which in turn pay a cut over to artists and songwriters.
How big a cut each artist gets depends very much on their deals with any labels or distributors they work with. With a distribution deal, they could be getting 100% of the money that flows to their distributor, with a pre-digital record contract they could be getting a single figure percent.
Some in the industry have long argued that the payments received by many artists from streaming are too low. One proposal to address that problem is the introduction of an equitable remuneration system like that which already applies to radio income in most countries.
Under such a system, at least some streaming revenue would flow directly to performers via the collective licensing system, with performers - including session musicians - paid at industry standard rates oblivious of their label or distribution deals.
Most proposed ER systems would see either labels and distributors, or the streaming services, or both, get a smaller percentage of streaming revenues in order to allow a slice to flow to performers as ER. However, the Living Wage For Musicians Act basically passes the cost onto the consumer instead, presumably based on the argument that streaming subscription prices were always set too low.
The proposals will almost certainly be strongly opposed by the streaming services, and some of the music industry too. The services will likely argue that the pretty hefty price increase caused by the levy would result in a significant number of subscribers cancelling, meaning that the boost provided by the levy would be countered by there being fewer subscribers overall.
That said, the streaming services have already begun increasing prices and that hasn't resulted in a big flurry of cancellations. A 50% price hike may well be different, but if a more modest levy was introduced, that might not have too negative an impact. And whereas the recent price increases benefit the services, superstars and majors the most, with the levy system all the additional money would flow to performers.
The Living Wage For Musicians Act has been developed in partnership with the United Musicians And Allied Workers, which has been campaigning for higher streaming payments for performers for sometime, including via the Justice At Spotify campaign.
Welcoming the new proposals in Congress, UMAW organiser Damon Krukowski says, “There is a lot of talk in the industry about how to ‘fix’ streaming – but the streaming platforms and major labels have already had their say for more than a decade, and they have failed musicians”.
“The Living Wage For Musicians Act presents a new, artist-centred solution to make streaming work for the many and not just the few", he adds. "We need to return value to recordings by injecting more money into the system, and we need to pay artists and musicians directly for streaming their work".