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Ivors Academy of Music Creators Written evidence submitted by the Ivors Academy of Music Creators THE IVORS ACADEMY WRITTEN SUBMISSION TO THE DCMS SELECT COMMITTEE INQUIRY: THE ECONOMICS OF MUSIC STREAMING November 2020 This Inquiry is welcomed. It follows the joint Ivors Academy and Musicians’ Union campaign to Fix Streaming and Keep Music Alive. We thank the DCMS Committee for this important opportunity to highlight systemic flaws in the current streaming market and would welcome the opportunity to provide oral evidence. OPPORTUNITY: the UK leads the world in music and can drive future growth The success of music streaming is powered by, and reliant on, the ingenuity of the songwriters and composers who create the music. The streaming of music, whether on pure music services or video on-demand, is expected to continue growing substantially. This presents a big opportunity for the UK to build on the enormous success of our position as a net exporter of great music and business hub for the licensing and administration of these markets. Supporting the development of a strong creator community should be at the centre of the UK Government’s industrial strategy post-Brexit and post-Covid. PROBLEM: songwriters and composers are prevented from receiving appropriate streaming income The maxim that holds in digital - ‘content is king’ - is not true for the economics of music streaming where Major Music Intermediaries reign, rather than those responsible for creating the content upon which these corporations have been built. Creators face a lack of transparency, lack of trust, royalty distortions and inefficiency. A Creators’ Value Gap results from value leaking away on its path from the consumer to the creator. Covid-19 has exposed the scale of the problem for all to see since other sources of revenue for songwriters and composers have disappeared or been significantly reduced. We have an opportunity, one which thousands of music creators are calling for, to investigate this important topic and find solutions that enable both creators’ and corporate interests to thrive. RECOMMENDATIONS FOR GOVERNMENT: 1. Major Music Intermediaries Regulation: introduce regulation of Major Music Intermediaries to ensure parity with the way in which Collective Management Organisations (CMOs) are regulated. Regulation should ensure adherence to minimum standards of disclosure on interests, policies, payments, and in- kind benefits, including auditing rights for groups of creators. A Code of Conduct is required to set out minimum standards. 2. Copyright Reform: implement a package of copyright reform, based on the principles of liability of online platforms and provisions around greater transparency, improved contract terms and fairer pay for writers and performers. 3. Data and Administration Reform: set a timeframe for implementation of the reform of Collective Rights Management systems and the implementation of a Minimum Viable Data Standard for music recordings. Such a standard must require basic metadata relating to the underlying composition to ensure that fewer streams fall into the un-allocable ‘Black Box’. 4. Research: commission research into creators’ earnings, the value of the songwriting contribution and related rights, the revenue, costs and business models of music streaming across the whole chain and whether the algorithmic curation used by streaming platforms is biased, discriminatory or inhibiting cultural diversity. KEY SUPPORTING POINTS Related Issues Recommendations Page 1 Songwriters’ and composers’ rights have been undervalued since the start Major Music Intermediaries Regulation 17 of the online market. Copyright Reform Research 2 The principles of accountability and transparency that apply to collecting Major Music Intermediaries Regulation 19 societies as a consequence of the Collective Management of Copyright Copyright Reform (EU Directive) Regulations 2016 and protections outlined in Chapter 3 of the European Copyright Directive should be implemented in the UK for the work of Major Music Intermediaries. A Code of Conduct is required that sets out minimum standards of accountability and transparency. 3 Songwriters, publishers and Performing Right Organisations should Major Music Intermediaries Regulation 20 receive income from shares in lieu of royalties and there should be full Copyright Reform disclosure of any advances and guarantees received by Major Music Intermediaries. When publishers are unable to distribute such funds or economic benefits received by the corporate groups to individual songwriters or composers they should be paid to charities that benefit songwriters and composers. 4 All songwriters and composers should benefit from advances and Major Music Intermediaries Regulation 21 guarantees from streaming services to Major Label Intermediares, not just Copyright Reform those who are already receiving the most (e.g. via market share based distributions), and there should be consistency in treatment and transparency when it comes to these revenues. 5 Songwriters and composers should not suffer a further transfer of value to Major Music Intermediaries Regulation 22 Major Music Intermediaries which will occur if broadcasters are in future Copyright Reform licensed in the same way as music streaming services. Research 6 Creators are being disenfranchised by the cost and NDAs attached to Major Music Intermediaries Regulation 23 audits. Creators should have the right to group audit (i.e. a number of Copyright Reform creators combining to undertake and share the costs of an audit). 7 Songwriters and composers are not extracting commensurate value for Major Music Intermediaries Regulation 26 the time and resources they are now investing in the development of Copyright Reform artists and their sound. 8 A majority of music fans believe songwriters and composers should be Research 29 paid more from streaming and would pay more if this money went to music creators. 9 Songwriters and composers wish to see further consolidation and Data and Administration Reform 35 efficiency of collective rights management to deliver global licensing and administration solutions that mend the ‘leaky pipes’ which dilute creators’ earnings. 10 The songwriting needs to be valued more highly and more of the value of Major Music Intermediaries Regulation 40 licensing needs to be paid to creators. Too much value is currently lost Copyright Reform due to inefficient licensing and administration processes across the world. Data and Administration Reform Research 11 Streaming Black Box royalties should be paid to creator organisations to Data and Administration Reform 41 run projects that will improve the awareness, understanding and timely registration of music metadata. This will reduce the amount of unattributable streams being generated and deliver a more efficient operation for DSPs and Collecting Societies. Increased efficiency equals increased value to songwriters and composers. 12 Songwriters and composers would like to see a proper trial of User Centric Data and Administration Reform 42 Payment Systems to inform industry decisions around switching to this system. 13 Songwriters and composers would like to see a single registration portal Data and Administration Reform 44 for writers and publishers that can reconcile and propagate accurate copyright data around the world. The UK Government could fund a research project to establish this in the UK. 14 Funding is needed to set up comprehensive training and education Data and Administration Reform 45 programmes for the songwriter and composer community on how to properly register and manage their data. 15 Songwriters and composers seek legislation to mandate that a Minimum Data and Administration Reform 45 Viable Data Standard be imposed on DSPs to provide an incentive for better music industry data. ABOUT THE IVORS ACADEMY The Ivors Academy is the UK’s independent professional association for music creators. Our membership comprises thousands of songwriters and composers across all genres at every stage of their career. UK Music’s most recently published figures show that, before the Coronavirus outbreak, music creators alone contributed £2.5 billion in GVA to the UK economy – almost half of the industry’s annual total of £5.2 billion.1 Our campaign to fix the streaming market The Ivors Academy has been campaigning for change within the economics of streaming for some time but has found an industry locked into market practices that are dominated by the largest music industry corporations. The Academy has called for a Government-backed review as part of its joint Fix Streaming campaign with the Musicians’ Union. The campaign petition, ‘It’s time to fix streaming and keep music alive’, on Change.org has so far secured over 17,000 signatures in support of a review.2 This review comes at a pivotal time for UK music creators as the streaming market develops, the UK is leaving the European Union and we are trying to find ways for livelihoods and businesses to survive the economic impacts of the global pandemic. It provides a very welcome opportunity for all key participants in the streaming industry to provide information and discuss the extent to which the current situation is fair, equitable, transparent, efficient, and pro-creator. Our efforts to establish the facts Access to information which would support a discussion of the current situation in a meaningful way has been a problem in the industry for some time. Many of the key organisations and companies that hold much of the industry data and statistics
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