Streaming Tops the Charts: Music streaming booms whilst the industry’s economics is under Parliamentary review
February 16, 2021
2 min read
What's going on here?
In 2020, the UK music industry enjoyed an 8.2% increase in music consumption as more than 155m albums were bought or streamed. Despite such growth, there is rising concern over the structure of payments in the industry.
What does this mean?
Although lockdown rules wiped out the live music sector, the streaming of music continued to grow last year. Accounting for more than 80% of overall music consumption, streaming increased by more than 20% in lockdown. The British Phonographic Industry (BPI), the UK music industry trade body, suggests this boom has benefited new artists. It claims increased streaming has led to a rise of investment in emerging UK acts, boasting the statistic that nearly 200 UK artists are now achieving 200m streams a year. However, many songwriters have recently turned the spotlight onto the unfair economics of streaming.
Whilst you listen to your favourite artist, have you ever thought about what happens to the money you spend on a monthly subscription? It may surprise you, but Taylor Swift is not directly paid every time you listen to Love Story! Instead, your money is shared between artists depending on how many streams they have had. Since Spotify, Apple Music and Deezer only pay around £0.004 per stream, many musicians are highly critical of this payment structure. As a result, a government select committee has opened an inquiry into the fairness of the “streaming economy”.
What's the big picture effect?
This is an important moment for music. Some musicians believe streaming is harming the creative industry as it simply does not pay enough. Whilst major labels make almost $20m a day from streaming, 82% of respondents to a musicians’ union poll earned less than £200 across an entire year. The bleak picture was recently painted by Mercury-nominated musician Nadine Shah and Elbow’s Guy Garvey who told the select committee that many musicians cannot afford to pay their rent. This inequality in the streaming market means, as the chief executive of the BPI comments, “it is harder than ever for artists to achieve success”.
With the current method of payment letting musicians down, a ‘user-centric payment system’ has been debated. This would mean your entire subscription fee would go directly to your favourite artist rather than being split with others. Such reform could result in the government imposing legislation to regulate streaming. This may have significant legal implications for many existing contractual arrangements between composers and their record labels.
Rather than worry whether listeners will stream their music, many artists have sold the rights to their songs. As a result, businesses such as Hipgnosis, a music investment company have cashed in on the streaming boom. Given the significant amount of cash involved, like Shakira’s recent multi-million-dollar sum, this trend will likely impact the wider financial market as other songwriters may look to sell for financial security.
There is no doubt that streaming has transformed how people listen to music. However, with many in the industry struggling to make ends meet, musicians now look to Parliament for help. Although some are sceptical about what increased regulation may mean, the future of the music industry may depend on it.
Report written by Henry Bee
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