The music streaming industry is to be investigated by the government over suggestions that artists do not receive their fair share of royalties
There are concerns songwriters and artists receive much less money than record labels when tracks are played on streaming services such as Spotify.
There are also reports that session musicians do not receive any payment for streams at all.
An industry working group will be set up to look into these concerns.
The government has been investigating music streaming since 2019, and in 2021 identified an “imbalance” in royalties.
Dame Caroline Dinenage, who chairs the Digital, Culture, Media and Sport (DCMS) Select Committee investigating the industry, said it was a “welcome step towards addressing the frustrations of musicians and songwriters whose pay falls far short of a fair level”.
But it should result in concrete change and not be just a “talking shop”, she added.
In 2020, the government heard from musicians such as guitarist, producer and songwriter Nile Rodgers, who said record labels retain up to 82% of the royalties they receive from streaming services.
Sophie Jones, chief executive of the British Phonographic Industry, said she was concerned it might discourage investment at a time when there was the prospect of increased competition from artificial intelligence.
“Numerous studies have demonstrated that streaming has benefited consumers and artists alike, with record labels paying more to artists than ever before,” she told the Press Association.
‘My money, my music’
Will Page, former chief economist at Spotify, said the music business is currently debating the way money is being allocated: “For artists, if you get 1% of all the streams in Britain… you get 1% of all the cash generated in Britain.”
This is because artists are not paid a set amount every time a song is played on Spotify.
According to its website: “Royalty payments that artists receive might vary according to differences in how their music is streamed or the agreements they have with labels or distributors.”
Mr Page pointed to an alternative model, a user-centric payment system, which some argue may be fairer. He said this would involve “ring-fencing” a person’s subscription fee to the music they listen to, making it “my money, my music”.
This would result in a person’s subscription fee being divided among the artists they listen to.
But he also raised concerns about whether this working group would make a difference: “We’ve had a three-year-long DCMS Select Committee inquiry, which had countless verbal hearings, written submissions, PDF reports – and we’re doing it again.”