Music makes a significant contribution to the UK economy and to the perception of the UK globally. As of 2019, UK music contributes £5.2 billion to the UK economy and is the world’s second biggest market. But what is the music business without creators? Music creators are vital to the future of our cultural experience and the cultural economy, and so it is important to understand how they are financially rewarded, and the extent to which it is possible to build sustainable livings out of musical work.
Different groups see these issues in different terms. Many music creators have been claiming that the revenue they receive from streaming is too small. For some, this is because contracts with rights-holders (such as record companies) have not been sufficiently adjusted to reflect changes to the industry brought about by streaming. Conversely, rights holders call for greater recognition of the investment they continue to make in artist development and marketing, arguing the focus should be on increasing the size of the overall pie, which could be achieved by filling the ‘value gap’ created by video platforms as YouTube.
Despite the significance of the subject and the differences of opinion, there is a striking lack of evidence in this field. In the absence of objective evidence, the discourse has been dominated by anecdotes. For example, Zoe Keating, a Canadian-born cellist, shared regular updates on her earnings from different streaming music services. Many media accounts have used her income as an example to depict the grim reality of the situation for many artists and suggests that the middle-class has become wiped out and streaming is unsustainable for many musicians. In this discussion, a so-called ‘pay-per-stream’ rate is frequently used as a denominator to demonstrate the ‘paltry,’ ‘negligible,’ and ’meagre’ amount music creators receive from the millions of times their music has been streamed.
The Covid-19 pandemic and subsequent lockdown has further amplified the arguments, highlighting the disparity between the money being made by intermediaries and the money being paid out to creators. Income from live performance has long been an important source of income for music creators, balancing the relatively low amounts of money from streaming. Covid-19 has severely limited the amount of live music performance that is possible. In contrast to this, use of, and subscriptions to, music streaming services have increased during lock-down. Spotify, the world’s biggest streaming music service, announced 14% growth in Q3 and a 15% rise in subscription revenues despite the pandemic.
In the wake of this crisis, musicians, songwriters and related organisations such as the Ivors Academy and Musicians Union (MU) have staged campaigns such as Keep Music Alive and the Broken Record Campaign to bring these issues into a wider and more high profile public debate, calling for a range of changes in streaming royalty pay-out arrangements. This debate has recently caught the attention of the UK Parliament’s Digital, Culture, Media and Sport (DCMS) Select Committee who have launched an inquiry into the economics of streaming, as well as the state of revenue distribution on streaming platforms.
The need to explore how music creators gain remuneration has never been greater. However, the lack of evidence has led to a polarised view dominated by somewhat simplified arguments without consideration of the wider aspects of the music economy or the complexity involved in royalty distribution. Moreover, the perceived lack of transparency, underlying issues involved in the management of music data, as well as the changing system of musical production and consumption centred on streaming music platforms rather than purchase of individual musical items such as CDs have so far prevented a better understanding of music creators’ earnings in the streaming age.
Beginning in May 2020, an independent academic team of Dr. Hyojung Sun (Ulster University), Prof. David Hesmondhalgh (University of Leeds), and Dr. Richard Osborne (Middlesex University) have been undertaking research that seeks to provide objective evidence in this highly controversial area of research. Funded by the UK Intellectual Property Office (IPO), the project aims to facilitate a constructive debate. The research team is still in the process of collecting data. At the ESRC Social Science Festival NI, Dr Hyojung Sun will provide more details about the project and its background.
Dr Hyojung Sun
Research Associate in Creative Industries, Faculty of Arts, Humanities and Social Sciences, Ulster University
Recent book, Hyojung Sun (2018) Digital Revolution Tamed: The Case of the Recording Industry, Palgrave MacMillan (https://www.palgrave.com/us/book/9783319930213)
Music Creators’ Earnings in the Streaming Age takes place on Wednesday, November 11, 2020 2:00 PM – 3:30 PM. Register for free here…
We are a university with a national and international reputation for excellence, innovation and regional engagement, making a major contribution to the economic, social and cultural development of Northern Ireland.