Apple Music and Spotify, two of the most popular music streaming services, were asked by the U.K. parliament to give artists featured on their apps a higher cut of profits as the U.K. parliament pushes for fair pay for musicians.
Apple Music and Spotify’s Royalty Fees
United Kingdom government officials are now looking to change the way that musicians get paid for their music.
The officials cited concerns over how streaming funs are distributed between the apps, the record labels, and the artists.
The U.K. parliament had launched the inquiry into streaming service payouts back in 2020.
According to the BBC, Spotify pays artists between $0.0028 and $0.0053 per stream. Meanwhile, Apple Music pays about $0.0082 per stream. YouTube pays the artists less, as it only gives out $0.00072 per stream.
However, in April, Apple pointed out the discrepancy in the findings and claimed that it pays artists a penny per stream, as reported by Apple Insider.
According to the findings of the U.K. government, artists get about 13% of the revenue that they make off of their music, with the rest of the profits going toward their record labels and the music distributors.
Artists who release their own music or those who work with independent labels get a higher share since they don’t need to split the profit to numerous middle-men. Still, many of these artists have a more difficult time getting fans to notice their music on the app so they can stream it.
U.K. government officials argue that the profits should be 50/50 between the artists and the labels, which has been the rate for radio play.
Julian Knight, MP, who chairs parliament’s Digital, Culture, Media and Sports or DCMS committee, said that while streaming has brought profits to the recorded music industry, the artists, performers, composers, and songwriters behind it are losing out.
Famous artists like Paul McCartney and Mick Jagger have called on U.K. Prime Minister Boris Johnson to reform the way artists are paid through Apple Music, Spotify, and other streaming services.
Record Labels Push Back
Record labels are fighting against changes, claiming that giving artists a higher cut could damage their investments in new music.
The U.K. Parliament is pressing into three major record companies: Universal, Sony, and Warner Music. M.P.s have accused the major record labels of being evasive about how the industry works.
David Joseph, CEO of Universal Music U.K., said that streaming is 24-7 in every country globally and that people can listen to any music at any time. He said that it is a sale and on-demand, unlike the radio that plays whatever music it got lined up.
The representatives from streaming companies have claimed that they are more amenable but were fast to point out that most of the money goes to publishers and labels.
Parliament suggests that the government pass legislation to give artists equitable remuneration, where labels and artists get an equal share of streaming royalties.
The U.K. Parliament also suggests that musicians and songwriters should be able to reclaim the rights to their work from labels after a certain period of time.
The payment situation is the same in the United States, with artists earn just 12% of the revenue, according to Rolling Stone.
In 2020, streaming accounts for 79% of U.S. music industry revenue. The number increased 25% from 2019. However, buying music online decreased 18% between 2018 and 2019.