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UK government calls for ‘reset’ of music streaming to ensure fair pay

Pitiful returns” from streaming to improve for artists as UK MPs call for a complete reset of music streaming to ensure fair pay.

A committee of MPs has said that the music industry is weighted against artists, who receive only 16 per cent of royalties earned in the Β£736.5 million UK streaming market.

After a six-month inquiry into music streaming, they said that royalties should be split 50/50 instead of the current rate.

Streaming payout increase UK
Image: Reboot Recording

While streaming has brought significant profits to the recorded music industry, the talent behind it – performers, songwriters and composers – are losing out,” said MP Julian Knight, who chairs parliament’s Digital, Culture, Media and Sport (DCMS) committee.

Only a complete reset that enshrines in law their rights to a fair share of the earnings will do.”

The DCMS inquiry report says:

β€œThe pitiful returns from music streaming impact the entire creative ecosystem. Successful, critically acclaimed professional performers are seeing meagre returns from the dominant mode of music consumption.”

“Non-featured performers are frozen out altogether, impacting what should be a viable career in its own right, as well as a critical pipeline for new talent.”

Estimates in the report show that streaming services take 30-34 per cent of revenues from a stream, with the label taking 55 per cent and the rest being shared out between the recording artist, publisher and songwriter.

In March, protests erupted in regards to Spotify’s poor payouts to artists, when it was revealed the company had tripled in value throughout the pandemic but failed to increase payment rates.

The current average payout per stream on Spotify is $0.00437, to put that in context, an artist will need 229,000 streams to earn $1000.

The call for reform raises ethical issues for both streaming companies and consumers, with the attraction of Spotify bringing access to essentially all songs for a low subscription price.

Smaller platforms such as Bandcamp and Soundstream provide a more intimate connection between artists and listeners, paying the artists more but charging higher fees for listeners.