Audio streaming just overtook video, and that’s great news for artists
Six months ago, YouTube seemed unstoppable. Streams of music videos on its platform trumped that of most streaming services combined, much to the dismay of artists and rightsholders who received paltry revenues from the Google-owned platform.
Six months later, and the landscape is very different. According to the BBC, “Apple Music and Spotify delivered 114 billion streams in the first six months of 2016, with video platforms on 95 billion.”
Why the sudden change? Whilst it’s partly speculative, some cite the deaths of Prince and David Bowie as well as the eventual streaming release of Adele’s 25 (which was streamed 168 million times in three days) as a boost to the audio streaming – and music – industry.
Whatever the reason, this is excellent news for artists and rightsholders who have long bemoaned the meagre sums that YouTube doles out– albeit completely legally and in line with current legislation.
And it’s that legislation that is currently under fire. Fresh off the heels of 186 mainstream musicians signing a letter to US Congress demanding an overhaul of the ‘safe harbour’ provided by the arguably obsolete Digital Rights Communications Act, nearly 1,000 artists have just lodged a similar complaint of the ‘value gap’ created by safe harbours outlined in the EU Commerce Directive.
“While music consumption is at record highs, user upload services are misusing “safe harbour” exemptions,” says the letter. “These protections were put in place two decades ago to help develop nascent digital start-ups, but today are being misapplied to corporations that distribute and monetise our works.
“Right now there is a unique opportunity for Europe’s leaders to address the value gap,” it continues. “The European Commission’s forthcoming review of copyright legislation can fix this profound market distortion by clarifying the appropriate use of safe harbours.”
But what should this new legislation look like, and what should it ensure?
It’s a fact: artists, musicians and rightsholders receive inconsistent revenues from streaming companies. History tells us that industries don’t tend to regulate themselves without intervention, usually in the form of legislation. From energy companies to coffee growers, free-market competition is rife with tales of poorly compensated suppliers and exorbitant price increases on products in demand.
We’ve held entire seminars on how to shift the consumer assumption that music should be free. In those discussions, the ideal benchmark seems to be some unknown future point when subscription overtakes free, and there is more revenue share to be distributed. But given that streaming services are currently operating within existing legislation, it will need to be changes in law that finally deliver a fair deal for artists. As Tim Westergren, CEO of Pandora told Pitchfork: “We can’t go on as it is.”
It’s all well and good for CEO’s of steaming companies to agree that free streaming isn’t working, but – like many industries before it – it is phenomenally unlikely that they will gather around a single table and hammer out a set of terms under which they all will operate. This is where legislation will need to create that level-playing field, by dictating new terms under which music can be licensed for streaming. Let’s face it: the shift in the expectation that music is free will never be demanded by the consumer.
And that’s where YouTube’s lag in dominance may serve artists’ well. As licensing terms and royalties are renegotiated, it is well worth artists, musicians and rightsholders keeping the pressure on. If shifting consumer expectation that music should be free proves impossible to take hold, then the legislation needs to create a landscape where ‘free’ also means ‘fair’ for creators.
Music 4.5: The Politics of Licensing will take place on 27 September 2016 in London. A companion seminar, Music 4.5: The Value Gap will take place in New York on 25 October 2016. For more information and to book your tickets, please visit the Music 4.5 website.