Below is my speech supporting a successful motion I wrote (see above photo) asking the Musicians’ Union to lobby to change streaming distribution models.
Conference, I request that you support motion two on online streaming.
Online streaming is quickly becoming the primary mode of listening for consumers. As of 2018 and according to the IFPI’s State of the Industry report:
Streaming revenue grew by 34.0% [in 2018] and accounted for almost half (47%) of global revenue, driven by a 32.9% increase in paid subscription streaming. There were 255 million users of paid streaming services at the end of 2018 accounting for 37% of total recorded music revenue. Growth in streaming more than offset a 10.1% decline in physical revenue and a 21.2% decline in download revenue.
On a classical specific front, according to the recent MIDIA & IDAGIO report, streaming represents 37% of the total classical music market value
However, this increased in revenue is not making its way to those artists and rightsholders who subscribers are actually listening to.
The current system of payment for most streaming companies is a pro-rata system. This means that all subscription money, minus the service’s costs, is collected into a pot and divided by the number of streams which hit a given listening duration (usually 30 seconds). This means that if a listener only streams one track in a month, most of their subscription goes to rights holders whose music they have not heard. This unfairly disadvantages long-form, niche and independent music in favour of short form and popular music. It also enables a user to trigger greater payments in a month than they pay into the system, as has been reported through the Bulgarian scam.
It takes around 3,000 streams (based on payouts of around 0.3 to 0.4p a stream which roughly what I’ve seen and reported by Digital Music News) by a Spotify user to trigger payments of more than their £10 per month subscription fee. If these streams were Ed Sheeran’s Beautiful People at 3min 17 seconds, you would need to listen for about 5h 30 mins every day for a month to hit those 3,000 streams. A large amount of listening yes, but not impossible. However, it would take about 13 hours a day to rank up 3,000 streams, and so a similar payment, of Pink Floyd’s Us and Them at 7min 49. Increase or decrease the durations and you can see how the system skews to short and popular music and unfairly disadvantages long-form music. In recent years the average song length has become shorter, which has been attributed to this shift in economics.
When talking to users of streaming services they are often shocked that the money they pay per month does not just go to the artists they listen to and in fact often goes to ones they don’t. They assume that who they listen to are the only people who get paid.
Services such as Primephonic and IDAGIO (both classical focused, a genre disproportionately affected by a pro-rata system) use durational payments (e.g. based on a payment triggered for every 30 seconds listened). Spotify’s Discover Weekly tracks a user’s listening habbits to recommend new music to listen to. In all cases, this is proof that the technology exists for the data collection to enable a fairer alternative to the current streaming payment models of the main streaming companies.
I urge the union to do everything in its power to lobby the streaming companies to change the payment model to a User Centric system where a user’s subscription fee is divided between the music they actually listen to. This means that if they only listen to one track during a month their whole distributable subscription fee goes to the right holders of that one track rather than payed to those whose music they haven’t listened to. This will reduce streaming fraud and increase payments for long-form and niche music. This will also increase payments across the board for all but the top 10% of artists, as described in a 2018 study commissioned by the Finnish Musicians’ Union.
Conference, I urge you to support motion two to help fairly share the increased income generated through streaming and rebalance the income lost from the decline in album and download sales. Thank you.