Music creator group calls a ‘fair trade’ in music streaming

November 2014

Internet, recorded music, music publishing, artistes


A new report launched by the International Council Of Creators Of Music, or CIAM, has called for a more equal distribution of streaming royalties between the respective music rights owners – overhauling of the streaming royalty system which is increasingly seen as favouring record labels above music publishers, songwriters and artistes.

CIAM is a global body that sets out to “protect the rights and assert the cultural aspirations of music creators”, while its report also has the backing of CISAC, the global grouping of music publishing collecting societies, as well as Music Creators North America and Canadian collecting society SOCAN. The report was written by Professor Pierre-E Lalonde, and it says: “The split in revenues between the different sets of rights holders is imbalanced. A combination of regulatory constraints, market imbalances and situations where major record labels negotiate with digital services for all categories of rights holders, has led to a significant disparity between the revenues paid to record labels and to creators”. He goes on: “In the business of streaming, the split of monies from streaming platforms is geared more favourably towards record labels and performers vs songwriters and music publishers”, before recommending “a more equitable division of revenues between the various rights holders, with a 50/50 split between recording and composition”.

With the ‘big three’ recorded music majors – Sony, Universal and Warners controlling a substantial share of the music publishing market through Universal Music Publishing, Sony ATV / EMI and Warner Chappell,  songwriters and standalone publishers will likely face an uphill battle to shift rights holder splits to something akin to 50% to recorded music and 50% to the music and lyrics – just as artistes have struggled to establish they should share equally with record labels from the recorded music ‘share’. Why? Well the three major labels pay over far less of the digital pie to recording artists than (the same three) major music publishers pay to songwriters. Professor Pierre-E Lalonde also makes a number of other proposals about digital licensing arguing that streaming firms should be passing over a higher proportion of their revenue to the music rights owners (currently about 60-70% of revenues goes to rights owners) and calling for more transparency in the way the labels’ digital deals are done. The study recommends that no less than 80% of gross revenues from all sources paid to all rights holders would offer fairer compensation for the overall use of music by streaming services and  the study recommends that all parties should have total access to any and all pertinent information that could impact remuneration.

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