UK government calls for Spotify streaming reform
The Culture, Media and Sport Committee (CMS) recently launched a new report calling for Spotify to implement a “fundamental reform” for songwriters, with the aim of improving artist royalties.
MPs from the CMS warned that many individuals in the creative industries, including musicians, are facing significant challenges “to make a living” due to issues with copyright protection, and calls on the government to ensure that creators are “compensated” appropriately amid private copying and artificial intelligence concerns.
The new inquiry takes evidence collected from various industry individuals over the last six months, and claims that “creators across the sector have experienced persistent declines in their royalties and residuals.”
It states that streaming services such as Spotify “depresses royalties and residuals”, resulting in individuals who “do not have statutory rights to remuneration for other uses of their works, which creators enjoy in other jurisdictions.”
On royalties benefits, the report explains that “royalties can provide income smoothing (making earnings more stable) and financial certainty for those who receive them,” citing the issue of paying “out less to creators (if at all) compared to other modes of distribution.”
The committee has called for a reform that will “incentivise an optimal rate for publishing rights in order to fairly remunerate creators for their work,” recommending a revenue divide between recording and publishing rights.
Dame Caroline Dinenage MP, chair of the CMS Committee, said that “many of our talented actors, writers, composers and singers are failing to share in the global success of the UK’s creative industries” due to “sector struggles” caused by AI concerns, along side “rapid changes in the way content is consumed.”
Dinenage also explained that to diminish creators’ “poor relations”, the government “needs to play catch up by plugging the gaps in outdated copyright and intellectual property regulations.”
The streaming platform has been hitting headlines for a number of reasons as of late, including a decision to hike up prices to adapt the increasing demands of international markets. The giant announced plans to heighten its prices in America, this will see an increase by $1 per month for individual plans and $2 per month for duo or family plans. In the UK, prices will increase by up to £2 per month for duo or family plans.
The new pricing process led Spotify to experience a profit for the first time at the end of last year. The pricing came with a new royalties restructuring that meant artists need to hit a minimum threshold for streams before receiving any compensation. Customers, along with small and independent artists, have been hit the hardest with the new changes.
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