The UK music industry is going through a period of internal arguments, and as sometimes happens some of us are reaching out for an adjudicator, or referee.
January 2021 saw the UK’s law makers brought into the ring in a big way. With Members of Parliament it’s always hard to know whether they see themselves as referees or as protagonists. In a series of streamed Q&A sessions a parade of music industry executives and participants – artists, former artists, accountants, etc – made sure there were plenty of fists flying; in a biting winter sleet of subsequent private and public debate the commentariat tried to decide among themselves who had landed a blow on what or on whom.
The background to this bitterness is the impact streaming has had as it became the dominant revenue source for recorded music, and therefore for some, but not all, of the UK’s artists. In these pandemic years the other leg of the stool, live performance, has disappeared, so some artists are suffering badly. And gallingly the biggest owners of catalogues of recorded music are enjoying growth and profitability, much of which comes from recordings they funded or bought decades ago.
Different markets make commercial sense of different deal structures. When the big catalogue owners controlled distribution an exclusive recording contract with a recoupable advance made a lot of sense. The label was on the hook while the account was in the red: advances are recoupable from record sales, not recoverable or repayable. Trading as much as 80-90% of future revenue for present funding worked while a band built a following, with the intention to inflate future advances, and to cash in on touring and merchandise, which traditionally were out of the label’s grasp.
Those contracts now seem unfair to many. The asset value of the copyright in the recording sits on the label’s balance sheet, and the biggest labels move into profit long before the artists do, as well as enjoying a far greater share of the future revenue. Streaming seems to have woken up a lot of older recordings that wouldn’t have made it onto the shelves in record shops. With such a strong grip on the top of the market the biggest labels have parlayed control of distribution into a reasonable position in the control of exposure and discovery, which is now most of the value creation game in music.
I think it would be fair to ask what the biggest labels are doing with the windfall profits from back catalogue that streaming has rained on them. But that doesn’t address the question of whether they have structural advantage, and if so whether it is earned. And it doesn’t start to consider whether such a structure is good for music in the UK or anywhere else.
This very live and somewhat acrimonious debate popped up again in a surprising context in January 2021. On a another streamed aural enquiry, this time into the problems the ICO, the UK’s information commission, is facing, lawmaker Damien Green asked about the use of data in the context of music services such as Spotify, Apple Music, YouTube and others. He asked, – are musicians adversely affected? The ICO punted. The question was very pertinent, in my view, but perhaps in ways that might not have seemed immediately obvious.
My professional life has been dedicated to the music industry, and it coincides with the disruption and regeneration that the connected digital world has brought. Green’s question, seemingly simple, brought many of the structural problems music faces right to the surface.
There are, as I see it, three distinct facets to problematic use of data in music:
- Music services use music listening data, as well as social media and other tracking data, to give themselves a critical advantage over musicians and record labels when either predicting, or increasingly deciding, which music will give its creators and investors a return on their investment.
- Music services track listeners in many different environments on social media and the web, and participate in the grey personal data economy, in ways that are almost entirely invisible to the music industry and to music fans, and almost certainly often illegal.
- The music industry as an ecosystem has many databases but has been slow to move towards interoperability and transparency. This makes it hard for many of the people who contribute to the creation of music to know who is storing information about them and their work, and impossible sometimes to supply missing data or correct errors.
Many people in the music industry have been working diligently to overcome these problems, with some success. In fact, the UK provides a very outsized proportion of the global music industry’s critical shared infrastructure, and hosts important centres of excellence and development.
For the UK there are opportunities for some relatively small interventions from Government which could make a dramatic difference to the healthy flow of music and data in the music industry and in the public realm. I suspect that other regulatory regimes could find similar benefits from similar approaches.
Two suggestions from me would be:
- A single centre of research and data that would help inform the music industry and policy makers on all issues related to the creation and enjoyment of music. This might be hosted at a University, or perhaps the British Library. It should be tasked with supplying facts rather than opinions or speculative applications.
- An annual ‘state of the music nation’ report which recognises all the interests in music and performance, commissioned by the government as the representative of the public, and holding copyright owners, music services, and others to account. Over time this could surface internal music industry tensions earlier, and provide a fascinating history of the music industry in the UK.
Between them these two interventions would hugely improve the quality of the debate within the music industry, and between the industry and external stakeholders of all kinds, including the public.
Of course none of this by itself answers the increasingly important questions about whether the people who create and perform the music are fairly treated, and whether the industry seems sustainable as we all consider how we will emerge from the pandemic. What does ‘build back better’ mean for music?
On yet another UK Parliament enquiry, Jeremy Silver, who runs one of the UK’s critical agencies promoting and catalysing innovation, and who himself has a music industry background, made what seemed to me an essential point. The creative industries generally, he suggested, lack a formal approach to innovation. There’s a lot of new and interesting work going on, he was quick to point out, but perhaps (was the implication) it translated into less new economic value than it could if it were better structured.
In the UK’s music industry, and the increasingly connected global markets, we find it hard to cooperate with each other, and the result can be seen in the bitter and factionalised arguments that sometimes spill over into the public sphere. Perhaps the UK could find a role for itself in the future music industry as a centre for coordinated research and strategic thinking, to everyone’s benefit.