If you don’t follow the UK’s Ivors Academy, you really should.
Ivors Academy CEO Graham Davies has shared his hopes for streaming remuneration reform following positive noises from the majors on the issue.
Universal Music Group CEO and chairman Sir Lucian Grainge confirmed his support for a fresh approach to streaming royalties in January. “What’s become clear to us and to so many artists and songwriters – developing and established ones alike – is that the economic model for streaming needs to evolve,” he said as part of his traditional New Year message to UMG employees.
Speaking in the May issue of Music Week, Davies said he was encouraged by the comments, which he considered to be testament to the work of the DCMS Committee and movements such as the Ivors’ Fix Streaming campaign.
“It’s great to hear Universal and Warner talking about remuneration reforms,” he said. “Ultimately, what we’re looking for is for the value of those rights to be higher.
In which I have my first exchange with ChatGPT about Spotify royalties.
you know, you're right. Spotify royalties are much more difficult than solving for π. We'll be quoting you, thank you for that clarification. https://t.co/bkYUlIXInN
Over the last decade, we’ve seen the size of the music revenue pie grow significantly as the popularity of streaming services has skyrocketed. Today, streaming accounts for 84% of U.S. recorded music revenue. Over 90 million people in the U.S. subscribe to one or more music streaming services for the price of a few cups of coffee a month. And global revenue from music streaming, both paid and ad-supported, is predicted to grow to $90 billion by 2030.
Yet, since the inception of music streaming, a core question remains unanswered: How should these streaming services pay music creators? How do we slice up the revenue pie? It’s a question of fairness with no easy answer.
Pro Rata Model Vs. User-Centric Model
Currently, the primary model for the distribution of digital royalties is the “pro rata model.” Under this approach, all music usage and royalty payments are aggregated across the platform. In other words, listeners’ subscription fees pour into a single pot of money, which is then divided (pro rata) across the billions of streams every month on the service. The percentage that creators are paid is proportional to their number of streams across the overall platform.
As an alternative, some services are starting to experiment with a new “user-centric” or “fan-centric” model whereby a particular person’s subscription dollars are divided up only among the artists to whom they specifically listen. None of your subscription payment goes to artists that you don’t stream. And there are other variations on this individual-focused approach (such as the “ethical pool” or the “creator support” models).
Artist Rights Watch--News for the Artist Rights Advocacy Community 