UK Parliament Inquiry Recommends 'Complete Reset' Of
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Bulletin YOUR DAILY ENTERTAINMENT NEWS UPDATE JULY 15, 2021 Page 1 of 32 INSIDE UK Parliament Inquiry • New Concertgoers Recommends ‘Complete Reset’ Fueling Live Music Comeback, Data of Streaming Business Shows BY RICHARD SMIRKE • Spotify Stock Drops as Analysts Warn Company LONDON – A U.K. Parliament committee is calling Amazon Music, is unsustainable in its current form. Must Prove Podcast into question the major record labels’ dominance “Streaming has undoubtedly helped save the music Strategy of the music industry — and how they leverage that industry following two decades of digital piracy, but market power at the expense of artists, songwriters it is clear that what has been saved does not work • Britney Spears Can Hire Her Own Lawyer and independents — and is asking the government to for everyone,” the committee writes in its 200-page in Conservatorship refer the matter to the U.K. competition enforcer for report. “The issues ostensibly created by streaming Fight further investigation. simply reflect more fundamental, structural problems A report from The Digital, Culture, Media and Sport within the recorded music industry. Streaming needs • Dierks Bentley’s Seven Peaks Festival (DCMS) Committee published Thursday (July 15) a complete reset.” Clashes With Local says the Competition and Markets Authority (CMA) In 2020, roughly two-thirds of Spotify’s global Officials Over should conduct a “full study of the economic impact streams came from music distributed by the major Cancellation of the majors’ dominance.” record labels, Spotify said in a March 19 written sub- The DCMS committee says its recommenda- mission to the DCMS committee, although that total tion, part of a much-anticipated final report from its includes content owned by independent labels that 10-month probe into the economics of music stream- distribute through major labels. Apple told the com- ing, is based upon “deep concerns” that competition in mittee that close to 75% of music its customers listen MARKET WATCH the recorded music market is “being distorted” by the to comes from major labels. PAGE 29 overall market share controlled by Universal Music, In the U.K., majors’ make up 75% of the recorded SONGWRITERS Sony Music and Warner Music. music market, with independents accounting for the & PRODUCERS But the committee’s report goes further, concluding remaining 25%, according to the Association of Inde- CHARTS in sweeping fashion that the global streaming model pi- pendent Music. PAGES 30 - 32 oneered and dominated by Spotify, Apple, YouTube and (continued) TOTAL IMMERSION ESSENTIAL ANALYSIS of the latest business topics and trends formulated to give industry players the competitive advantage in a rapidly changing market. EXCLUSIVE QUARTERLY REPORTS that deliver in-depth, holistic reporting; case studies; and custom data designed to serve the industry. A DEEP DIVE LIBRARY stocked with intelligence on fan data, SUBSCRIBE TO BILLBOARD PRO FOR song catalog sales, TV synchs, Africa’s burgeoning music ACCESS TO NEW REPORTS business and the gaming industry’s embrace of artists. 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ON SALE : 8/7 | AD CLOSE: 7/28 | MATER IAL S DUE: 7/29 CONTACT Sp ue Joe Maimone 201.301.5933 | [email protected] LE Lee Ann Photoglo 615.376.7931 | [email protected] 21 Cynthia Mellow 615.352,0265 | [email protected] Marcia Olival 786.586.4901 | [email protected] Ryan O’Donnell +447843437176 | [email protected] Editorial content subject to change Page 3 of 32 IN BRIEF A referral to the competition enforcer is a Among its biggest recommendations, the royalties split between labels and artists, potentially serious escalation. In cases where committee report calls for the introduc- generated 85 million pounds ($110 million) the CMA finds businesses engaging in anti- tion of equitable remuneration on music in 2019, compared to 628 million pounds competitive practices or abuses of dominant streams — similar to what already exists in ($812 million) from streaming. positions it has the power to bring criminal the U.K. for TV and radio broadcasts — and Responding to the committee report, BPI proceedings, or force divestments. It did so in which would see streaming royalties split chief executive Geoff Taylor said it was “es- February, when the CMA ordered ticketing 50/50 between labels and performers and sential that any policy proposals avoid un- company Viagogo to offload its StubHub distributed via a collecting society. Equi- intended consequences for investment into business outside of North America follow- table remuneration also guarantees royalties new talent, and do not imperil this country’s ing an investigation into complaints of unfair to non-featured performers (such as session extraordinary global success in music.” competition. (Viagogo has yet to announce a musicians) on recordings. AIM CEO Paul Pacifico called equitable sale of the assets.) By contrast, under the current “making remuneration a “20th century solution not “This is a once in a lifetime moment to available right” only the copyright owner fit for the 21st century digital market.” He reset our business along fairer and more receives payment, which it then shares with warned its introduction “will leave the next equitable lines,” said a spokesperson for U.K. the artist according to the terms of their generation of artists worse off.” artist bodies the Featured Artists’ Coalition contract. Average royalty rates are typically The report also recommends that Uni- and Music Managers’ Forum, welcoming the set between 20% and 25% on new artist versal and Warner Music follow Sony’s DCMS committee’s report and its recom- deals and far less on legacy contracts. lead and no longer apply existing unre- mendations for a CMA investigation. The DCMS committee calls equitable re- couped balances to earnings for eligible The DCMS committee report comes amid muneration “a simple yet effective solution artists signed prior to the year 2000. increasing scrutiny of the major labels’ to the problems caused by poor remunera- The committee also calls for an end to the market power in the U.K. In April, more tion from music streaming.” That’s not a practice of distributing unattributed digital than 200 artists, including Paul McCart- view shared by labels, who stand to take a royalties — so-called black box collections ney, Chris Martin, Annie Lennox, Rob- large financial hit if the principle is applied. — based on market share and, instead, rec- ert Plant and The Who’s Roger Daltrey, The labels argue that the loss of earn- ommends that collecting societies reinvest signed a letter to British Prime Minister Bo- ings under equitable remuneration would them back into the industry. ris Johnson calling for an “immediate reduce their ability to invest in new acts and Other recommendations include a government referral” of the multinational could hamper the ability of rights holders to requirement for labels, publishers and corporations that wield “extraordinary negotiate licensee agreements with stream- collecting societies to provide greater power” over the music business to the CMA. ing services, by making it harder for them to transparency around royalty chains and In assessing factors in the majors’ hold walk away from negotiations. the commissioning of government research over the market, the committee cites the Labels trade body BPI says TV and radio into the impact of streaming services’ algo- acquisition of competing services and the broadcasting, which is already licensed un- rithms on music consumption. system of cross-ownership. der equitable remuneration in the U.K. with The report additionally calls for enhanced AUTHORITATIVE INTELLIGENCE. 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