15 July 2021CopyrightRory O'Neill

UK MPs demand music streaming overhaul

A group of MPs have called for an overhaul of the UK’s rules on music streaming, which they found is delivering “pitiful” returns to artists.

A report from the House of Commons Digital, Culture, Media, and Sport Committee published today, July 15 calls for new legislation enshrining artists’ right to an “equitable remuneration” from music streaming revenues.

The wide-ranging report on the “Economics of Music Streaming” criticises a market dominated by record labels and tech platforms at the expense of artists, who have already suffered from the loss of live music income during the COVID-19 pandemic.

MPs also called for more checks on tech platforms’ protection under safe harbour rules, which grant them exemption from liability for copyright-infringing content uploaded by users. The committee urged the government to fund a full market study into YouTube’s dominance in the ad-funded music streaming market.

Rivals including Spotify and Apple Music argued that Google-owned YouTube enjoys a particular advantage in this area, partly because safe harbour laws allow it to generate significant revenue from user-generated content with the protection of safe harbour laws.

Elena Segal, global senior director of music publishing at Apple told MPs of an “unlevel playing field” between subscription-based services and ad-supported platforms such as YouTube.

“They do not necessarily have licences for all of the music that they use and … they do not need to. Even where they do have licences the amount they pay, because of the way their business model is set up and the way the tariffs work, is less.”

Musician Tom Gray added that safe harbour functions as a “get-out-of-jail-free card for Google from copyright and competition law”. Rival platforms and musicians argue that YouTube’s privileged position allows it to pay significantly less than its fair share to artists.

Responding to the criticisms, YouTube told the committee that its free, ad-supported model caters to users who might otherwise turn to piracy.

“YouTube is proud to contribute to the industry’s remarkable growth, having paid out $3 billion to rightsholders in 2019 globally. The payments are made according to the terms of our bilateral agreements and we of course enter into those agreements with the intent that artists and songwriters will be compensated fairly,” the platform told the committee.

MPs cited evidence showing that YouTube’s contributions to artists are still far outstripped by the $15 billion it takes in from advertising revenues.

In addition, its contributions don’t match up to its position in the market, the committee found. While YouTube “accounts for 51% of music streaming per year, it only contributed 7% of all revenue,” MPs wrote, citing evidence from Sonstream, an alternative streaming start-up.

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