‘Pitiful returns’: Music streaming model needs ‘complete reset’, inquiry concludes
Musicians and songwriters receive “pitiful returns” from streaming and the entire model is in need of a “complete reset”, an inquiry has concluded.
Following several hearings involving stars including Chic’s Nile Rodgers, Elbow’s Guy Garvey, Radiohead‘s Ed O’Brien and solo singer Nadine Shah, as well as bosses from major record labels and streaming platforms, the digital, culture, media and sport committee has found that artists are not being fairly rewarded for their work.
Artists including Noel Gallagher, Robert Plant, Rebecca Ferguson and Lily Allen are among a host of stars who have called on Boris Johnson to update the law on streaming rights, while Gary Numan told Sky News he received just £37 for a hit that had been streamed more than a million times.
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Gary Numan: ‘It isn’t even worth printing out the statement’
The DCMS committee report, released on Thursday and based on more than 300 pieces of evidence, raises “deep concerns” about the position of the major music companies in the market.
MPs on the committee are now calling on the government to refer the case to the Competition and Markets Authority (CMA) to launch a study into the “economic impact of the majors’ dominance”. They also say a system of equitable remuneration for streaming income – where performers have a right to receive a share without reference to their label contracts – should be introduced.
According to the Broken Record campaign, artists receive around 16% of the total income from streams – while record companies take around 41% and streaming services around 29% – figures that both the Musicians’ Union and independent trade body the Ivors Academy have described as “woefully insufficient”.
Recommendations made following the inquiry include:
- The introduction of measures allowing music creators to recapture the rights to their work from labels after a period of time
- Give artists the right to adjust contracts if their work is successful beyond the remuneration they receive
- The government should introduce legally enforceable obligations to normalise licensing arrangements for user-generated content-hosting services such as YouTube
- The government should also require publishers and collecting societies to publish royalty chain information to provide transparency to artists about how much money is flowing through the system
Some successful and critically acclaimed musicians are seeing “meagre returns” from streaming, while non-featured performers on songs are being “frozen out altogether”, the report states.
Streaming started to come under increased scrutiny in 2020, with artist revenue from live performances pretty much wiped out by COVID-19.
During his evidence session in December, Chic frontman Nile Rodgers described the current system as “unfair” and said artists are “really kept in the dark” about the worth of their music. At an earlier hearing in November, Garvey, O’Brien and Shah warned that the future of music in the UK is under threat as many artists were struggling with living costs.
Nadine Shah, whose album Holiday Destination was nominated for the Mercury Prize in 2018, told the inquiry that despite her success she struggled as the pandemic hit and her income relied almost solely on streaming
Shah, a Mercury Prize nominee, became emotional and said she was “embarrassed” to talk about it publicly but admitted she falls into that bracket, saying that despite her success her earnings from streaming are not “enough to keep the wolf away from the door”.
In February, bosses at Spotify, Apple and Amazon defended their streaming models but agreed they would potentially be willing to “get together” to explore options.
Record labels Sony Music, Warner Music and Universal Music also appeared before MPs during the sessions.
Following the release of the inquiry’s report, chair of the DCMS committee Julian Knight said: “While streaming has brought significant profits to the recorded music industry, the talent behind it – performers, songwriters and composers – are losing out.
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“Only a complete reset of streaming that enshrines in law their rights to a fair share of the earnings will do.
“However, the issues we’ve examined reflect much deeper and more fundamental problems within the structuring of the recorded music industry itself.
“We have real concerns about the way the market is operating, with platforms like YouTube able to gain an unfair advantage over competitors and the independent music sector struggling to compete against the dominance of the major labels.
“We’ve heard of witnesses being afraid to speak out in case they lose favour with record labels or streaming services. It’s time for the government to order an investigation by the Competition and Markets Authority on the distortions and disparities we’ve uncovered.”
Shipping traffic through the vital Suez Canal artery in Egypt has plunged by 66% since cargo was forced to divert due to attacks on vessels, according to official figures.
The data, from the UK’s Office for National Statistics (ONS), covered the period from mid-December to the beginning of April.
It is important as it represents the scale of disruption to supplies through the artificial channel linking the Mediterranean Sea to the Red Sea since Iran-backed Houthi fighters started firing on ships in the run-up to Christmas last year.
There are fears that soaring costs for insurance, fuel and wages risk stoking a fresh wave of inflation as the diversion to Europe from destinations such as manufacturing powerhouse China, around the southern tip of Africa, adds up to 14 days to transit times.
Separate ONS data covering the pace of price increases is yet to show any real impact on the UK economy but the Bank of England is among institutions monitoring the situation as a number of companies report a hit from higher costs.
Container prices, for example, rose by more than 300% as the disruption gathered pace early this year.
Houthi fighters based in Yemen have been targeting ships which, they claim, have links to Israel.
They argue that they are acting in sympathy with Palestinians and a number of attacks have found their targets despite a US-led naval operation to protect vessels in the Red Sea.
The vast majority of major shipping companies have, for some months, used the diversion around the Cape of Good Hope.
The ONS said volumes started to increase in December 2023 and throughout the first weeks of 2024, more than doubling levels observed in February 2023.
“By the first week of April 2024 (week 14), the volume of cargo and tanker ships through the Suez Canal was 71% and 61% below the level of ship crossings seen in the previous year, respectively.”
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Why the crisis in Yemen is getting worse
It added that weekly crossings through the Strait of Hormuz, off the coast of Iran between February and April, showed a “significant decrease” compared with previous years.
It noted that shipping journeys were particularly low between weeks five and 10, with an average 23% reduction in crossing volumes compared with the same weeks in the previous year.
This was mainly due to lower tanker crossings, it noted.
Read more:
Why are the Houthis attacking ships in the Red Sea and what does it mean for inflation?
Iranian navy seizes tanker in Gulf of Oman
The prospect of more perilous journeys for tankers has been a factor behind rising oil prices.
Brent crude, which had been trading around the $80 a barrel mark at the start of the year, rose as high as $91 earlier this month amid the see-saw of tension across the conflict in the Middle East.
It culminated in tit-for-tat attacks between Israel and Iran.
It is currently trading at $88, reflecting the lack of escalation since last week.
The AA reported on Tuesday that average petrol costs in the UK had crossed back above the 150p-a-litre mark for the first time since November.
Experts have warned that they probably have further to go, with a weaker pound versus the dollar this month adding to higher oil costs as the commodity is priced in the US currency.
Business
Post Office boss Nick Read led ‘campaign to defame and ostracise me’, ex-HR director claims
A former HR director at the Post Office, whose misconduct claims against chief executive Nick Read were dismissed following an internal investigation, has written to MPs in a bid to plead her case.
Jane Davies, who was in post for seven months from December 2022 until she was dismissed, claimed Mr Read led a “deliberate campaign to defame and ostracise me” after she failed to secure him a satisfactory pay rise.
In the March-dated letter released by the business and trade committee on Tuesday, Ms Davies said she spent the first eight weeks in her role as group chief people officer dealing with Mr Read’s “pay demands”.
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He has previously denied an allegation by sacked Post Office chairman Henry Staunton that he had threatened to resign numerous times on the pay issue.
Ms Davies said she was writing to the committee in support of Mr Staunton’s version of events in his evidence to the committee in February.
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February: Post Office redress delay overshadowed by executive drama
“He [Mr Read] regarded the final offer of 5% increase as insulting,” she wrote.
“As a result, he regarded me as a failure for not getting the remuneration increase. What followed was a deliberate campaign to defame and ostracise me.
“From my perspective, his charm had been replaced by someone who was not authentic or honest and importantly who lacked genuine concern or care for others, employees, hard-working postmasters and those that had been wronged.
“The role that I was being asked to do, looked nothing like the role that had been sold to me when I was recruited. It was clear that cultural change that needed to start with the senior leaders, was simply not high on Nick Read’s agenda.”
The Post Office announced last week that its chief executive had been “exonerated of all misconduct allegations” following an independent review into the bullying allegations.
The issue has proved to be a further thorn in the organisation’s side as it faces a public inquiry over the handling of the Horizon IT scandal that saw hundreds of sub-postmasters wrongly convicted of theft and fraud.
At the same time, the government has moved to speed up redress for all those failed.
Mr Staunton, who also wrote to the committee in correspondence that was released on Tuesday, expressed concerns over a “lack of clarity around the investigation” into Mr Read’s conduct.
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January: Why sack Post Office chair after a year?
The former Post Office chair, who was sacked by the government in January, was also the subject of a complaint raised by a whistleblower that he said related to an alleged use of politically incorrect and potentially offensive language.
“The implications of the allegations, namely that I am racist and misogynistic, are ones that are deeply distressing, would be contested by everyone who knows me, and are definitely not borne out by my behaviour as a champion of diversity in all the organisations I have worked for, including the Post Office”, Mr Staunton wrote.
“It is not clear to me how these allegations became incorporated into an investigation which was prompted by a whistleblower complaint about alleged bullying by the chief executive, particularly as the complaint was directed at no-one else, and did not mention me by name.”
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The business and trade committee issued no comment when it released the contents of the letters.
A Post Office spokesperson responded: “Just last week a highly reputable barrister produced an extensive, robust, and impartial report that fully exonerated Nick Read of all the misconduct allegations levelled against him, and in so doing discredited many of the claims raised in these letters.
“For the avoidance of doubt, the barrister was fully empowered to investigate and conclude as she saw fit.
“Our focus remains on providing redress for postmasters; learning from the grievous errors of the past; and building an organisation able to meet the challenges of the future.”
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