Earlier this month the Digital, Culture, Media and Sport (DCMS) Committee, the UK parliamentary committee which oversees government music industry policy, published its long-awaited report into the economics of music streaming. The Committee’s inquiry received around 300 submissions and heard evidence from record labels, publishers, streaming services, performers, writers, and of course, PRS for Music.
The inquiry provoked a wide and public debate on something songwriters, composers and publishers have long understood — music streaming is generating significant revenues, but this is not reflected in the royalties creators receive.
As the Committee’s report notes, the overall share of streaming royalties paid to writers and publishers has grown in recent years, certainly in comparison to the rates applied to CDs. We have also seen far more licensing in the market, particularly of social media and user upload services. These developments have allowed us to consistently grow the online royalties collected (£42 million in 2015 to over £188 million last year) and paid out.
'Good data ensures songwriters, composers and publishers can be paid quickly and accurately.'
While we have seen some progress and we are moving in the right direction, there is still much more we can and must do as an industry.
The publication of this report provides an important opportunity for the industry to really focus on how streaming has changed our business. It's an opportunity to ensure streaming, the predominant way in which fans will access their music for the foreseeable future, works for all parts of the music industry and is fostering and supporting growth, innovation and creativity. The Committee sets out its own views on how the music streaming market can work more efficiently and royalties be paid more fairly. We are of course carefully considering all these recommendations and will work with the government to promote positive and practical solutions where needed.
I would like to take a moment, however, to focus on a few key themes highlighted by the Committee’s report, where PRS is already active and working on behalf of its members.
Data management has always been fundamental to what we do. Good data ensures songwriters, composers and publishers can be paid quickly and accurately. In the streaming market, data also directly determines how much we can collect on behalf of members — royalty rates and payments are informed by our ability to identify the works used. If the usage data is incomplete or inaccurate, royalties flow much slower or can’t be collected at all.
'The Committee’s report echos our concerns and we will continue to press the UK government, as we did so successfully in Europe, for a change in the law to ensure that wherever, whenever and however members’ works are used, they are fairly paid.'
There are currently too few incentives for streaming services, specifically user upload services, to improve the quality and quantity of data they provide us with. We welcome the Committee’s focus on establishing minimum data standards but believe this must be extended to core principles of how and when content recognition tools are used. We are consistently urging the government to use the powers it already has to ensure users provide better and more regular data. This must now happen.
Of course, better usage data must be matched by improvements and efficiencies in copyright data — the ownership of the songs and compositions. We entirely support the Committee’s recognition of the need to improve the accuracy and speed of matching sound recording and compositions identifiers. Also in the desire to see greater efficiencies in the flow of streaming royalties.
PRS has long been a leader in tackling the challenges of data management in a digital market. In ICE, we have a world-leading licensing hub offering licensing, processing and copyright services. ICE now licences and collects royalties for its customers in over 160 territories. Our ICE Cube project will allow the automation and seamless integration of works data from other societies into our existing copyright database. Ultimately, we are delivering the 'comprehensive database of musical works' the DCMS Committee’s report rightly identified as being essential to better royalty payments.
'The principle that it is only the responsibility of the rightsholder to find unlicensed usage is both outdated and places a disproportionate burden on the industry.'
Another key strand of the Committee’s report focuses on the role and impacts of social media and video sharing platforms such as TikTok, YouTube and Facebook on the music streaming market. In my evidence to the DCMS Select Committee, I called on the government to introduce new laws to ensure that social media and video sharing platforms are responsible for all the music used within their services. They must be required to seek a licence and we must prevent the practice of 'use first, pay later' which sees new platforms claiming to be exempt from copyright while growing their users and ultimately their income by providing access to music. The Committee’s report echos our concerns and we will continue to press the UK government, as we did so successfully in Europe, for a change in the law to ensure that wherever, whenever and however members’ works are used, they are fairly paid.
Respecting the value of music online requires strong tools to tackle piracy, but also a significant change in mindset. The principle that it is only the responsibility of the rightsholder to find unlicensed usage is both outdated and places a disproportionate burden on the industry. As the government sets its priorities for the enforcement framework, it must ensure that the protections to tackle piracy are robust and effective and that platforms and services providers themselves play an active role.
As the government and the wider industry consider the DCMS Committee report and call for a ‘resetting’ of the streaming sector, we will be focused on ensuring that the value of songwriters, composers and publishers is properly recognised and their rights fully protected.
Read the DCMS Committee report in full.