artists – AEPO-ARTIS

Another study recognises the need for better remuneration of artists in the streaming economy

AEPO-ARTIS — Wed, 10 May 2023 06:28:49 +0000

A fascinating study written by Daniel Johansson of the Inland Norway University of Applied Science entitled “Revenue Distribution From Music Streaming – A Quantitative Analysis of Swedish Artists on Spotify” has been published and is available here.

Assessing the winners and the losers in the world of streaming, lessons can be learned for artists throughout Europe and beyond.

Do we want the revenue generated by Spotify and other DSPs to go to fake artists ‘creating’ making “white noise” recordings or is it time we found a way to make sure the money gets to those who deserve it, the creators and artists?

Scope of the study: what it covers

The study analyses all Swedish artists that have generated more than 1 million streams on Spotify since its release in 2008, gathers data for every track available from each artist and shows how individual genres have performed. Carrying out simulations of revenue generated by different categories of artists, it can (subject to certain limitations) show who are the winners – and who are the losers – in the Swedish Spotify streaming economy.

The study starts by stressing the need for a better understanding of the economics of streaming. The author examines the way the streaming model operates and provides a detailed explanation of e.g. why there is no such thing as a “per-stream rate”.

In order to carry out a number of simulations regarding revenue that might be received by various categories of artists, with various different types of record deal, he creates a model with a constant stream rate which is applied to the data collected.

The results are very revealing. Jazz, metal and classical artists fare very poorly, while artists in “niche” local language genres such as “epadunk” do very well, as do “playlist-friendly” newage/ambient artists

However, the simulation which shows the most profit is that of the “noise artist”, producing recordings of white/brown/pink etc noise. These are recordings of low frequency sounds, often designed for relaxation, concentration or sleep. One such “artist” can be estimated as generating more than $100,000 per month.

Scope of the study: what it does not cover

One of the most commendable aspects of this study is that it is aware of its own limitations. Without knowing the details of individual contracts between a record label and an artist, it is impossible to tell what amount the artist actually receives after the revenue they generate via Spotify has filtered through the label’s contractual labyrinth. As the author states, his simulations by necessity cannot take into account “advances and fixed costs like recording expenses, marketing, overhead costs and other details that are also a part of artist contracts”. The results of the simulations would of course be different if such things had been able to be taken into account, as the author acknowledges.

However, the author does make reference to the Music Creators’ Earnings in the Digital Era Study, which provides an insight into major label contractual practices.

– Record label contractual practices
The Music Creators’ Earnings study reveals the content of a 2020 Sony Music Featured Artist royalty

contract. Its provisions include: – Overheads

Under this contract, before any royalties are paid to the artist, Sony Music deducts 25% of gross revenue generated, which it uses to “cover its overheads”. It is remarkable that, as the study notes, “while a label’s overheads are fixed, the contribution that each release makes to those overheads will be based on 25% of that release’s gross revenue and will therefore rise as its revenue rises.”

– Marketing

This surreal situation with overheads is nothing when compared with the provisions regarding deductions made for marketing. 15% of gross revenue generated is deducted to cover “marketing” costs. This would be understandable were it to apply to e.g. the first year that the recording was released. However, these deductions are made throughout the entire life of the recording. For 70 years, 15% of revenue otherwise payable to the artist, will be deducted, disguised as marketing expenses, when of course no marketing whatsoever will actually occur for the vast majority of that time. Such practices may be legal, but they may also be deemed misleading and immoral.

– Investment by the artist

The author also does not have access to another vital component necessary to fully understand the artist’s position in streaming today. The investment made by an artist, both in terms of finance and time, is greater than ever before. An artist now needs to purchase equipment that will enable themselves to create high quality recordings. They need to spend time and money writing the songs, crafting them, rehearsing them in rehearsal rooms, before finally recording them. They then need to distribute their initial recordings on social media and other DSPs and to maintain a presence in order to achieve a sizeable following.

These tasks and costs were previously borne by the record label, which is why, together with their role in the manufacture and distribution of physical records/CDs etc, it was logical that they should receive a significant share of the revenue generated by the recording and it was logical that they should be allowed to recoup some of these costs against the artist’s share of the revenue generated. However, applying the same logic today, an artist ought to be able to recoup the investment they have made in a recording from the label’s share of revenue generated.

It was also logical that a record label should be legally defined as the sole “producer” of a record and benefit from the valuable copyright protection granted to producers. The definition of “producer” in international copyright law (the WPPT) is:

Article 2 (d) “producer of a phonogram” means the person, or the legal entity, who or which takes the initiative and has the responsibility for the first fixation of the sounds of a performance or other sounds, or the representations of sounds.

A record label may still meet this definition in the case of for example pre-packaged talent show contestants that “win” a record contract and are provided with a song, musicians, and a studio in which to record it. In other cases, record companies certainly do not meet this definition.

It is true that artists today have the option of being a DIY artist however the prospects of being able to sustain a career via this route are extremely small. The numbers speak for themselves: a 2022 study by the UK competition authority (CMA) shows that of the top 1000 recordings released in 2021 in the UK, 98% of them were tied to either a major record or major publishing label.

A system whereby modern royalty rates, contracts and revenue-splits do not take into account the role of an artist as the producer of their own recordings, and the investment they make in those recordings, is entirely obsolete.

– Equitable remuneration

Although this study does not directly cover the question of the need or otherwise to introduce a right to equitable remuneration, its findings contribute to a growing body of evidence that overwhelmingly supports such a right.

That body of evidence includes a study entitled “Streams and Dreams – A Fair Music Economy For All”, conducted by the same author as this study, in which he recommends that we “make use of both the Spain/Belgium ER model and the France voluntary agreement model, and that they both need to be balanced towards each other in a hybrid solution including all actors around the negotiation table. They are not in conflict with each other, they should complement each other.”

What this new study does address is “fair remuneration”, noting the fact that “many more artists stand perplexed over how their artistry does not translate into a fairer remuneration, at the same time as the intermediaries between the artists and their audiences report immense profits year after year”.

It is no wonder that artists are perplexed. Record label executive “remuneration” – such as the one time stock grant of up to $100 Million (and yes, that is in addition to the $250 million package received in 2021) payable to the Universal Music Group’s CEO – is exhorbitant. Why some of that amount cannot be shared with artists is, indeed, “perplexing”.

Conclusions

In the conclusions of the study, the author asks: “is it perhaps now time to start tweaking the streaming model towards a system that better reflects the immense cultural value that artists provide to fans and society at large?”

Those who have the interests of artists and creators at heart would answer with a definite “yes” and agree with him when he concludes by saying that:

“DSPs, labels, PROs, publishers, distributors, as well as legislators and politicians, all need to jointly focus on the broader picture; how to better remunerate the ones that in fact are the most important and most valuable asset, the music creators and artists.”

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Yet another detailed study calls for the introduction of a right to equitable remuneration

admin — Wed, 21 Sep 2022 13:24:04 +0000

On 15 September a study commissioned by IAO entitled “Streams & Dreams – A Fair Music Economy for All” was published, recommending the introduction of a right to equitable remuneration for streaming in the music sector. It is available here.

The purpose of the study was to investigate what is needed for a fair digital music economy to exist. It took into account all parties involved in the industry but focussed on featured artists.

Data was obtained from 200 professional active musicians in several European countries, and, to contextualize how ranking systems shape income, we examined platform recommendation mechanics used in recommended sweepstakes casinos alongside a thorough review of academic research on remuneration. The study focused on the right to equitable remuneration and also addressed user-centric versus pro rata models and collective management.

A survey showed that 87.5% of respondents are unsatisfied, or very unsatisfied, with their revenues from streaming platforms. It made specific reference to the fact that the findings were in line with other studies, including a study commissioned by AEPO-ARTIS.

It identified the problem with streaming as being the need “… to fix the true unfair practices in the music industry, imbalances in power that have led to a situation where… artists still do not receive a correct remuneration”

Among its findings were:

A right to unwaivable equitable remuneration must be introduced
Only 8.5% of respondents believed an ER solution would influence their revenues negatively.
Only 21% of the artists signed to a label were satisfied with their deal.
The current situation where some countries have implemented an ER right as a part of the DSM directive, while others have not, is not sustainable.

It found that a solution based on legislation which introduces the mere principle of “fair contracts’ does not work. It referred to a Norwegian law which has such a principle and stated that: “After four years it seems that the new act has not had any direct implications on praxis.”

Instead, it recommended a solution of introducing an ER right and concluding agreements with labels: “A hybrid model with both an unwaivable equitable remuneration right (the Spain/Belgium model) and agreements between label and artist communities (the French model) on fair contract practices.”

This is yet another study that comes to the conclusion that the introduction of a right to equitable remuneration is essential to a fair streaming industry. There is now overwhelming academic support for the introduction of such a right.

See also: WIPO Study “Artists in the Digital Music Marketplace: economic and legal considerations” by Christian L. Castle, Esq. and Prof. Claudio Feijóo (available here), “The Principle Of Appropriate And Proportionate Remuneration Of Art.18 Digital Single Market Directive: Some Thoughts For Its National Implementation”, by Professor Raquel Xalabarder (available here), and the DCMS Economics of Music Streaming report (available here).

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European audiovisual artists demand fair market conditions

admin — Thu, 26 May 2022 10:49:00 +0000

Ljubljana, 26 May

The European audiovisual industry needs modern legislation that will reflect the rapid development of digital technologies on the market, agreed participants of a regional conference on copyright. They called for the implementation of the EU copyright directive on the single digital market and a mechanism that would protect artists.

Decision-makers in EU countries have a historic opportunity to support the European culture and creativity and create good conditions for creativity, heard the conference on the copyright directive organised by the Association of European Performers’ Organisations (AEPO-ARTIS), the Screen Actors Guild of Slovenia and the AIPA, an organisation of rights holders, in Ljubljana on Wednesday.

This can be achieved through a good legal basis that will allow artists to get fair and proportionate compensation for the use of their works and the 2019 EU copyright directive enables this. Now it is up to EU countries to decide to what extent they want to protect their artists in the audiovisual industry, stressed the participants.

During the Covid-19 pandemic the use of digital technologies increased significantly. In countries which have good copyright systems artists survived the crisis a lot easier while in other countries artists’ social issues only deepened, said some of the participants, highlighting Spain as a role model.

According to José Maria Montes from the Spanish collective organisation of audiovisual artists AISGE, the Spanish audiovisual industry has seen enormous success in the past decades. Its production has turned Spain into a global player in culture and economy, which also means more production and higher revenue.

This was possible because of good legal foundations, as Spanish artists have had the right to compensation for four types of use of their work, including online use, since 1996.

Their German counterparts would like the same level of protection. However, by implementing the directive the state enabled them to be compensated for the use of their works on platforms for files exchange such as YouTube but not for the use on streaming platforms such as Netflix, HBO Max, etc., said the director of the German music copyright collection society GVL and AEPO-ARTIS head Tillo Gerlach.

Despite the law being passed, in reality artists do not receive compensation even from YouTube, as licensing of works is complicated, which is a result of legislation that did not set detailed rules.

AEPO-ARTIS secretary general Ioan Kaes said that one of the key challenges that European audiovisual artists face was the lack of appropriate legislation that would introduce rules for fair play on the market, including compensation. “Currently only 14 out of 27 EU countries have implemented the directive and Slovenia is not among them,” he said.

AIPA head Gregor Štibernik said the conference was extremely important for all copyright holders. “This conference is sending out the message to decision-makers that the audiovisual sector wants the directive to be implemented in a way that would enable all audiovisual artists to be as creative as possible.”

Robert Kordič, a copyright expert from CBS, presented a proposal for transposing the directive into Slovenian legislation. He said the proposal brought more rights for artists, primarily the right to fair and proportionate compensation for the use of their work.

Pal Tomori from the Hungarian Performer’s Rights Protection Association Office presented a system of expanded collective management, which has been implemented in Hungary. The system allows everyone who thinks they can manage their rights better to exit the collective organisation, he said.

STA (Slovenian Press Agency)
Photos by: Tamino Petelinšek/STA

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Video: La gestion collective au service des artistes

admin — Tue, 06 Jul 2021 09:38:00 +0000

La nouvelle video avec des sous-titres en français est disponible ici: https://vimeo.com/543120344

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