UK Report Calls on Government To Address ‘Pitiful’ Streaming Returns for Artists

LONDON — A U.K. Parliament committee is calling on the British government to address the “pitiful” returns that many artists and creators earn from music streaming and says it should develop and implement a “wide-ranging national strategy for music.”  

A report from The Digital, Culture, Media and Sport (DCMS) Committee published Friday (Jan. 13) urges the government to take a “more proactive strategic role” in the music industry to help ensure creators and performers receive a greater share of streaming revenue.  

The report doesn’t go into detail about what form an overarching national music strategy would take. But it nevertheless recommends it be developed and overseen by the DCMS and looks at the impact of new digital technologies on musicians, songwriters and composers, as well as the U.K. industry’s potential for growth.

Taking such an approach could help address many of the issues caused by the government’s current approach to policymaking for the music business, which sees policy and trade negotiations handled by multiple different government departments and, says the report, is “too scatter-gun to be effective.”  

The DCMS Committee’s recommendations come 18 months after it published a damning report in July 2021 on the economics of music streaming that called into question the major record labels’ dominance of the industry — and how they leverage that market power at the expense of artists, songwriters and independents. It concluded by saying that the global streaming model is unsustainable in its current form and “needs a complete reset.”   

In response to that report, the U.K. competition regulator carried out a market study review of the record business. It ended in November with the Competition and Markets Authority (CMA) surmising that low returns from streaming “are not the result of ineffective competition” between the three major labels — Universal Music Group, Sony Music Entertainment and Warner Music Group.     

The British government has also set up a number of working groups — led by the Intellectual Property Office (IPO) and made up of industry stakeholders — to look at issues raised in the Parliament probe, including problems around transparency and metadata.   

Reviewing the progress that has been made since July 2021, the DCMS committee commended the government and IPO for the work and research it has undertaken but said that more still needs to be done on core issues, such as creators’ share of streaming royalties.  

In particular, the committee recommends the IPO establish working groups to look specifically at remuneration and performer rights, with greater involvement from government officials and ministers. It also says there needs to be greater transparency around membership of the working groups, agendas and deadlines, none of which are currently made publicly available.  

“Over the last 18 months the Government has made some welcome moves towards restoring a proper balance in the music industry, but there is still much more to do to ensure the talent behind the music is properly rewarded,” Damian Green MP, acting chair of the DCMS Committee, said in a statement.  

Green says too many musicians and songwriters are frustrated at receiving “pitiful returns” from streaming and says the government “now needs to make sure it follows through on the work done so far to fix the fundamental flaws in the market.”  

The committee has also requested that the three major labels provide it with evidence of the royalties they have distributed to legacy artists under the various unrecouped advances programs introduced over the past two years.  

Sony Music Group was the first to announce, in June 2021, that it would start paying royalties to artists with unrecouped advances from pre-2000 record deals. Warner Music Group followed in February 2022 and Universal Music Group in March 2022. 

A spokesperson for the DCMS committee says that while it has no formal powers to compel businesses to provide them with information, businesses are expected to comply with the request. The government now has two months to respond to the committee’s recommendations and outline any actions it will be taking. (The DCMS committee, which is made up of 11 members of Parliament, is responsible for monitoring the policies and practices of the Department for Digital, Culture, Media and Sport and its associated bodies, including the BBC.)

Responding to Friday’s report, David Martin, CEO of the Featured Artists Coalition, and Annabella Coldrick, chief executive of the Music Managers Forum, said they “wholeheartedly” welcomed Parliamentary support for improved remuneration and contractual rights.  

“Our organizations are in complete alignment with other creator bodies on the need for greater fairness, transparency and remuneration.” Martin and Coldrick said in a joint statement. “These issues are not going away, and neither are we.”  

A spokesperson for U.K. labels trade body BPI thanked the committee for highlighting “the positive steps that the industry has taken” since its original 2021 report but cautioned against any calls for sweeping government reforms.

“At a time when the global music market is more competitive than ever,” the spokesperson says, “public policies must be firmly rooted in driving sustainable growth across the entire U.K. music ecosystem.”