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Music streaming platforms like Spotify should brace themselves for a new round of scrutiny. A key lawmaker in the European Parliament’s culture committee wants to make sure streaming giants pay better money and give more visibility to European music creators and artists.
« There is a loophole in our regulation. We have to close it, » Spanish Social Democrat MP Iban García del Blanco said in an interview. He is editing a relationship which he promises will be « intrusive in this market » because « it is the most unbalanced sub-sector of the cultural sector at the moment ».
The European Parliament’s move to recall Spotify and its colleagues highlights the frustrations of singers, artists and artists who have been left out in the cold by EU rulers as streaming giants have increasingly taken over the industry in recent years.
The Spanish lawmaker has backed calls to better distribute revenue from major streaming platforms to creators in the industry. García hopes his report, while non-binding, will force the European Commission to resolve the issue.
According to Véronique Desbrosses, director general of GESAC, which represents organizations that collect royalties on behalf of authors and composers in Europe, « the problem is that this music market is not regulated at a European level at all ».
Streaming « became the main way to access music and cannibalized the other ways, » which put artists at the mercy of platforms, he said.
Spotify, which is based in Sweden, is hardly alone. While it I had the highest global music streaming market share (31%) in 2021, its competitors include Apple (15%), Amazon (13%) and Tencent (13%).
« We talk about Spotify all the time, but there are many other examples, sometimes more influential, » said García. “TikTok is one of them as it establishes a new way of listening to music” in less than 30 seconds, she said, pledging to fight this new “impoverishing” model.
Olivia Regnier, director of EU regulatory affairs at Spotify, said she was happy to have this debate, but regretted that it started « with the assumption that there is a regulatory gap to fill, without asking what the problems are ».
Sharing the cake
Remuneration is expected to dominate the work of lawmakers on the report. 2019 copyright directive he introduced a principle of « appropriate and proportionate remuneration » but the size of the pie – and the actual money that goes to artists and creators – has yet to meet their expectations.
« We’re not paid decently. You have to have tens of thousands of streams to get a little bit of something, » Desbrosses said.
Last November the watchdog of the UK’s competition published its own study of the market, finding that the top 0.4% of artists accounted for more than 60% of streams. The UK regulator, however, also stressed that « neither record labels nor streaming services are likely to make significant excess profits that could be shared with creators. »
About a third of what a consumer pays to stream music is retained by the platforms themselves. The rest goes to labels and collective management organizations before making its way into artists’ pockets. UK lawmakers in 2021 valued that about 16.5 percent goes to the performers and 10.5 percent to the author and composer of a song.
Spotify’s Regnier pointed out that platforms have very little leverage or visibility into how much money actually goes to creators.
Additionally, « none of the streaming platforms are profitable, » noted Regnier, who also chairs Digital Music Europe, a lobby group that represents other services like Soundcloud and Deezer.
“We were criticized for not raising the price, but we started against piracy and we’re still tackling it,” he added, insisting that investment was still needed to keep streaming services attractive enough to beat pirated platforms. .
For GESAC chief executive Véronique Desbrosses, Spotify’s choice to invest in its global expansion is what actually holds back adequate remuneration and comes at « the expense of the value of music, » she said.
Transparency desired
Artists also want more transparency from the platforms on how they actually work.
« The problem is that we don’t know what recommendation tools look like. What we do know is that there are processes that are not acceptable, » Desbrosses said. He mentioned a feature introduced in 2020, called Discovery Mode, which allows artists to gain more exposure on the platform at the cost of lower royalty rates.
Regnier insisted it was one feature among others, and artists were free not to participate. « We provide as much information as possible » about the algorithms, Regnier added.
While the audiovisual industry benefits from quotas for ‘European works’, music streaming players are also under no obligation to promote European songs. « We want a reflection that goes in that direction, » said Desbrosses.
The film and music industries shouldn’t be treated equally either, Regnier said. « European music has always worked well, » he said, pointing to a study by the London School of Economics showing that 70 percent of the most popular songs in Poland in 2022 were Polish, for example, up from 10 percent in 2012, according to Spotify data.
CLARIFICATION: This article has been updated to show that the study cited by Olivia Regnier was conducted by the London School of Economics.
