MPs are investigating whether artists are paid fairly for music streaming

UK MPs will be starting an inquiry into the music streaming market this month, aimed at determining if artists are paid fairly by the likes of Apple Music, Spotify, Amazon Music and Google Play. The investigation comes as Spotify recently announced a new ‘promotional royalty rate’. The experimental feature will influence Spotify’s recommendation algorithm, pushing tracks to listeners via autoplay in exchange for the musician being paid a lowered royalty rate.

With streaming now being the primary way we consume music, the sale of physical and digital downloads have been rapidly declining year on year. In 2019, streaming generated over £1 billion for the record industry. However, most artists behind the music see very little of this amount.

Currently, Spotify is believed to pay between £0.002 and £0.0038 per stream. Apple Music are said to pay around £0.0059 whilst YouTube are paying the least at £0.00052 (0.05 pence) per stream – yikes! The funds are sent to rights-holders who then divide the money between artists, labels and publishers. The recording artists often receive only 13% of revenue from the streams. DJ/producer Jon Hopkins claimed to have received just £8 for 90,000 plays on Spotify.

Alongside pay, MPs will also investigate how playlists/algorithms suggest music and whether big names which dominate the platforms prevent us from discovering artists trying to breakthrough.

Chair of the committee Julian Knight MP has said :

“Algorithms might benefit platforms in maximising income from streaming, but they are a blunt tool to operate in a creative industry with emerging talent risking failing the first hurdle. We’re asking whether the business models used by major streaming platforms are fair to the writers and performers who provide the material. Longer-term we’re looking at whether the economics of streaming could in future limit the range of artists and music that we’re all able to enjoy today.”

The committee’s first session is expected to be held at the end of November and is set to seek evidence from industry experts, artists, record labels and streaming sites themselves to inform their investigation.