Does streaming have a positive impact on artists? MP’s question industry leaders.

In an attempt to restructure the streaming economy, various executives from leading DSP’s (digital streaming platforms) held an intense virtual session quizzed by Members of Parliament. 

Many of the issues were raised with Spotify, Apple Music and Amazon Music, including a lot on artist and songwriter royalty payments. Here’s our brief summary of the parliamentary session…

During the conversation it was suggested that “musicians are mostly miserable because of the system and the way that it operates” said Horacio Gutierrez, (head of global affairs and chief legal officer of Spotify). “I know streaming is having a positive economic impact on artists,” said Gutierrez, who suggests that the issue is how revenues “trickle down via various intermediaries”. He also says “We would definitely be open to looking at alternative models”.

Apple were in a strong position ahead of the hearing as they are on record as paying the highest streaming rates over any other DSP, based on calculations of its royalty payments. iTunes has also been at the forefront of digital music since 2003, with Apple Music paying about £0.0059 per stream (0.59 pence), while Spotify pays up to £0.0038 and YouTube pays just £0.00052!

Questions were raised about Amazon’s motives to mould its Prime membership model into a music streaming service with a subscription costing £7.99 for Prime customers. Paul Firth, Amazon Music, made the case for the company insisting it was a “meaningful business”, and that DSPs have transformed music discovery compared to traditional retail. 

“Streaming services are now very much about driving discovery, marketing artists, and marketing their own services”. Streaming services are seen to help break an artist more than a retailer ever did. “We play a much more active role in helping music lovers discover artists that they’ll love, and also helping artists connect with their maximum fanbase possible. Those are the things we aim to try and do.” Firth says. 

It was suggested that everyone in the industry needs to look at alternative royalty payment models, such as the user-centric model. (the royalties portion of their subscription is divided only among the rightsholders of the artists they listen to). “It’s time that we did look at how other models might work,” although it was stressed that it “has to be a model that works at scale”.

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