Streaming giants under fire as inquiry continues

Yesterday, three giants of music streaming gave evidence in the the latest in the DCMS Select Committee’s inquiry into The Economics of Streaming: Paul Firth (director of International Music at Amazon), Horacio Gutierrez (head of Global Affairs and Chief Legal Officer at Spotify) plus Elena Segal (global senior director of Music Publishing at Apple Inc).

All three platform representatives indicated that streaming isn’t a sales model and was more like a licence, rental, or broadcast that needed an original legal definition. Gutierrez explained that 'streaming is clearly a licence from a contractual perspective' - not a sale.

Gutierrez also said that that the three big labels demanded the bulk of streaming revenue and this meant the publishers had to accept a smaller percentage.

Naomi Pohl, deputy general secretary of the Musicians' Union, said that 'we must find a way to make the division of revenue more equitable for all musicians, creators and rightsholders.

'Given that the back catalogue controlled by major labels makes up such a significant share of music on these platforms, we must make sure that legacy artists are getting a fair deal, not just new acts. We must fix deals and put more collective rights management in place.

'Spotify also said that "streaming is clearly a licence from a contractual perspective" and not a sale. This means royalties should be paid to artists by labels at 50%. In fact none of the platforms’ representatives argued that streaming is a sales model, although labels pay out to artists on that basis.

'We also heard about the role of human curation in playlisting and ad-supported services, which point to a broadcast model like radio. It is becoming increasingly clear that we need a review of how streaming is categorised legally as this could significantly improve payments to musicians and create an entirely new royalty stream for session players.'

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