‘Pitiful returns’: Music streaming model needs ‘complete reset’, inquiry concludes

Published

3 years ago

July 14, 2021

admin

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.

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.

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.

Subscribe to the Backstage podcast on Apple Podcasts, Google Podcasts, Spotify, Spreaker

“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.”

Business

UK long-term borrowing costs highest this century

Published

2 hours ago

January 7, 2025

admin

UK long-term borrowing costs highest this century

UK long-term borrowing costs have hit their highest level since 1998.

The unwanted milestone for the Treasury’s coffers was reached ahead of an auction of 30-year bonds, known as gilts, this morning.

The yield – the effective interest rate demanded by investors to hold UK public debt – peaked at 5.21%.

At that level, it is even above the yield seen in the wake of the mini-budget backlash of 2022 when financial markets baulked at the Truss government’s growth agenda which contained no independent scrutiny from the Office for Budget Responsibility.

Money latest: Do I need to pay five-year old parking fine?

The premium is up, market analysts say, because of growing concerns the Bank of England will struggle to cut interest rates this year.

Just two cuts are currently priced in for 2025 as investors fear policymakers’ hands could be tied by a growing threat of stagflation.

The jargon essentially covers a scenario when an economy is flatlining at a time of rising unemployment and inflation.

Growth has ground to a halt, official data and private surveys have shown, since the second half of last year.

Critics of the government have accused Sir Keir Starmer and his chancellor, Rachel Reeves, of talking down the economy since taking office in July amid their claims of needing to fix a “£22bn black hole” in the public finances.

Both warned of a tough budget ahead. That first fiscal statement put businesses and the wealthy on the hook for £40bn of tax rises.

Corporate lobby groups have since warned of a hit to investment, pay growth and jobs to help offset the additional costs.

At the same time, consumer spending has remained constrained amid stubborn price growth elements in the economy.

Higher borrowing costs also reflect a rising risk premium globally linked to the looming return of Donald Trump as US president and his threats of universal trade tariffs.

The higher borrowing bill will pose a problem for Ms Reeves as she seeks to borrow more to finance higher public investment and spending.

Tuesday’s auction saw the Debt Management Office sell £2.25bn of 30-year gilts to investors at an average yield of 5.198%.

It was the highest yield for a 30-year gilt since its first auction in May 1998, Refinitiv data showed.

This extra borrowing could mean Ms Reeves is at risk of breaking the spending rules she created for herself, to bring down debt, and so she may have less money to spend, analysts at Capital Economics said.

“There is a significant chance that the Office for Budget Responsibility (OBR) will judge that the Chancellor Rachel Reeves is on course to miss her main fiscal rule when it revises its forecasts on 26 March. To maintain fiscal credibility, this may mean that Ms Reeves is forced to tighten fiscal policy further,” said Ruth Gregory, the deputy chief UK economist at Capital Economics.

Business

Growing threat to finances from rising bills

Published

8 hours ago

January 7, 2025

admin

There is mounting evidence that consumers are facing hikes to bills on many fronts after Next became the latest to warn of price rises ahead.

Business

Higher prices for 2025 as Christmas trading fails to meet expectations – BRC says

Published

14 hours ago

January 7, 2025

admin

Higher prices for 2025 as Christmas trading fails to meet expectations - BRC says

Shop prices will rise in 2025 as the key Christmas trading period failed to meet retailers’ expectations, according to industry data.

Shop sales grew just 0.4% in the so-called golden quarter, the critical three shopping months from October to December, according to the British Retail Consortium (BRC) and big four accounting company KPMG.

Many retailers rely on trade during this period to see them through tougher months such as January and February. Some make most of their yearly revenue over Christmas.

Money latest: MPs to question Shein and Temu

The minimal growth came amid weak consumer confidence and difficult economic conditions, the lobby group said, and “reflected the ongoing careful management of many household budgets”, KPMG’s UK head of consumer, retail and leisure Linda Ellett said.

Non-food sales were the worst hit in the four weeks up to 28 December, figures from the BRC showed and were actually less than last year, contracting 1.5%.

What were people buying?

Food sales grew 3.3% across all of 2024, compared to 2023.

In the festive period beauty products, jewellery and electricals did well, the BRC’s chief executive Helen Dickinson said.

AI-enabled tech and beauty advent calendars boosted festive takings, Ms Ellett said.

What it means for next year

With employer costs due to rise in April as the minimum wage and employers’ national insurance contributions are upped, businesses will face higher wage bills.

The BRC estimates there is “little hope” of covering these costs through higher sales, so retailers will likely push up prices and cut investment in stores and jobs, “harming our high streets and the communities that rely on them”, Ms Dickinson said.

Separate figures from high street bank Barclays showed card spending remained flat since December 2023, while essential spending fell 3% partly as inflation concerns forced consumers to cut back but also through lower fuel costs.

The majority of those surveyed by the lender (86%) said they were concerned about rising food costs and 87% were concerned about household bills.

More info to come

Numerous UK retail giants will update shareholders on their Christmas performance this week including high street bellwether Next on Tuesday, Marks and Spencer and Tesco on Thursday and Sainsbury’s on Friday.