Streaming is transforming the music industry: it’s removed gatekeepers, opened doors for artists to connect with wider audiences, and given fans access to a huge range of songs at attractive prices. .
Today, more than ever, artists and songwriters are getting paid. However, the unprecedented number of artists vying for a piece of the same streaming pie means that, for many of them, succeeding is just as difficult as it always has been.
These are not the conclusions of the BPI, but those of the Independent Competition and Markets Authority, which published the interim results of its study on music streaming last week.
He concluded that the market is positive for consumers, while giving artists more choice and control in terms of getting their music out to existing fans and building new audiences.
In a debate that, perhaps rightly because of the pandemic, has often been characterized more by anecdote than evidence, facts matter even more. It is therefore significant that a study by an objective and evidence-based regulator rejected many claims about the streaming market in its preliminary findings.
Of these, artists are not faced with take-it-or-leave-it terms from labels: they have more options to choose from than ever before, ranging from traditional label deals to a distribution or artist/label services, while average royalty rates for artists have increased dramatically since the advent of streaming.
Nor is there any evidence to support the claim that the majors maximize revenue from their recorded music businesses at the expense of sister music publishers. In fact, the AMC notes that publishers’ share has nearly doubled since 2007 to around 15%; while in absolute terms, overall UK streaming publishing revenue “increased significantly”.
Finally, the majors do not make excessive profits in relation to the cost of capital. They are, in fact, one of the main drivers of innovation and renewal in the industry, while taking a high level of risk to help new artists succeed, despite the high chances of winning in a highly competitive and unpredictable.
As the CMA observes, streaming has made the landscape hyper-competitive, and with a vast back-catalog now available through streaming and the number of artists streaming music rising from 200,000 in 2014 to 400,000 in 2020 , it is a simple economy that not everyone can succeed .
Even with higher royalties, the revenue artists make from streaming is limited by the limited viewing time available to fans, the increased competition from the ever-growing number of artists in the market, and the relatively fixed amount income generated by the market.
This is why our industry must now focus on closer collaboration to increase the total value of streaming. It’s the only realistic way to make every stream more valuable to everyone. This has long been the position of the BPI and it is the inescapable conclusion of the provisional conclusions of the CMA.
The streaming market has precipitated significant improvements in the supply for artists, with thousands more UK-signed artists now receiving regular royalties since major label moves to ignore unrecovered balances for artists from the pre-streaming era. This is in addition to long-standing programs aimed at providing real-time royalty information, data insights and more.
The skills, insight, investment and support of labels are essential in helping artists build a lasting and viable career in music. The CMA highlights the wide range of value-added services provided by labels, from traditional functions such as A&R and marketing to those more suited to the streaming era such as data management, global licensing and management. Rights. The success comes from this symbiotic partnership between the artist and the label.
And there are plenty of successes to celebrate. Despite growing competition, a diverse group of nearly 400 UK artists and bands achieved at least 100 million streams in 2021, up from 300 the previous year. This includes big stars such as Beabadoobee, Glass Animals, Griff, Jorja Smith, Nathan Evans, PinkPantheress, Rex Orange County and Tom Grennan, to name a few.
As has always been the case, what artists earn from their recorded music – streaming, physical and digital sales – supplements other sources of income, including live, broadcast and public performances, merchandising and synchronization.
I won’t pretend that everything with streaming is perfect. The market is changing rapidly and we must always strive to provide the most supportive environment possible for artists and songwriters and put them first in everything we do.
Ongoing IPO working groups provide the opportunity to work collaboratively across the industry to do this – through an industry-led code of conduct on transparency and improved metadata flow. We are also aware that session musicians have seen less benefit from the growth of streaming than other parts of the ecosystem, so we are exploring proposals to ensure they also benefit from the industry renaissance. .
Meanwhile, the focus on streaming has diverted attention from other vital issues we should be focusing on, such as: ensuring that new UUC platforms don’t exacerbate the “gap of value” from underpayment of royalties, but instead increase the value of streaming; persuade the government to properly consider the overwhelming case for doubling down on the successful music export growth program to boost exports, strengthen our independent sector and further improve our share of the growing global streaming market; advocate for the expansion of creative tax credits to stimulate investment in music production in the UK; and taking full account of potential opportunities and disruptions to Web3.
These present real opportunities to increase the value of streaming and the wider music economy for the benefit of all. In the meantime, there are clear and present dangers we have to deal with: the government recently proposed to weaken the copyright framework to allow tech companies to train their AIs to use our music without a license, and the Brexit continues to hamper UK tours.
BPI will work closely with other industry bodies to grow the business together. As the CMA report shows, great progress has already been made, and it’s time to put an end to the myth that labels are the source of the challenges facing streaming artists. Rather, labels are essential partners for artists to overcome these challenges – helping them stand out globally and brokering deals that increase the value of every stream.
Our industry is wonderful, filled with passionate and creative people from all walks of life, all doing what they do for the love of music. It’s time to capitalize on this shared passion to make the sector even stronger for everyone, create a diverse pipeline of the next generation of artists and executives and ensure the UK solidifies its status as a music superpower. for decades.