Equitable Remuneration in Music Streaming

Equitable remuneration (ER) is a contentious issue with significant ramifications for the UK music business. After being carefully introduced early in the inquiry by a well-organized group of artists and their advocates, ER became a substantial focus of the ongoing high-profile UK Parliamentary Inquiry into Streaming Economics.

The musicians who started the ER movement want legislation that applies ER to particular modes of listening on Spotify and Apple Music, such as autoplay (where the platform plays music it believes you'll like) and certain types of playlists. They claim that new ways of listening are more "radio-like," Thus, ER may be used to funnel considerably more money directly to artists under the law.

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Following ER's appearances at every level of the inquiry - to labels, publishers, streaming platforms, and industry organizations – there's a fear that MPs interested in the inquiry would see ER as a seemingly straightforward solution to the artists' appeals for more money from streaming. 

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There should be an answer for the music business

As Geoff Taylor, the chief executive of the British Labels Industry Association, mentions, not only would ER "not work as a solution" for artists, but it would also have "significant, detrimental repercussions on the long-term competitiveness of the UK company." Spotify's more laid-back operation should not be equated to the radio because, unlike radio, "you are in charge" of the song selection "at any point."

It's a tricky topic and without a doubt a highly crucial and complex one, with two critical components of the UK business divided on the subject - not to mention a bunch of politicians wanting to score a famous point in the middle.

Music Economic Model - Experts View

It is also essential to understand the thoughts of experts in the industry about the topic. Jane Dyball from Laffitte's Ltd mentions, "I'm no expert on ER, but I'm curious as to what problem Equitable Remuneration is attempting to tackle. Should some (or all) streaming providers be required to pay a higher fee? Yes, indeed. Will ER see to it that this happens? To cover their higher costs, streamers will attempt to cut other royalty payments. Will artists be paid more if nearby rights collection societies collect their rights? It is highly dependent on the artist, their label arrangement, the neighboring rights organization's competency, and their distribution restrictions. There are large numbers of elements that could influence the amount of money distributed."

According to Ana Rodríguez, the Co-Chair of IMMF, "It is the manager's role to develop long-term economic models for artists, and we cannot overlook the fact that we are still adapting to digital settings. There are inefficiencies, and creative Collective Management Organizations like Sound Exchange and Teosto have already decreased digital friction in-licensing and revenue sharing. The structure of radio and live music usage necessitates CMOs to obtain licenses, while streaming does not necessitate CMOs obtaining licenses. There may be more efficient options for boosting artists' negotiating power than outsourcing their haggling."