It’s time to investigate the unrevealed industry distorting reality

The results of the British Parliament’s music streaming survey were announced.

The results of the British Parliament’s music streaming survey have been announced. The monopoly is in serious chaos and the industry urgently needs to be restarted.

July 15, the British Parliament figures, culture, media and sport committee will (DCMS) published a report on the investigation of streaming media platform.

Earlier, the #BrokenRecords movement, which broke out because British musicians lost their offline performance income due to the epidemic, caused industry shock. The British government received 18,000 signed petitions. Immediately, DCMS launched a public investigation on the streaming media platform.

The committee recommended that the government deal with “the most fundamental and structural problems in the recording music industry” as soon as possible, and called on the UK Competition and Markets Authority (CMA) to intervene to fully investigate monopoly issues in the industry.

Council Chairman Julian Knight said, “We heard that some witnesses were afraid of losing profits to them by big labels or streaming media platforms. It is time for the CMA to intervene and investigate the distortions in the industry that we have not revealed. .”

In the report, the committee clearly expressed their concerns about the guiding role of large music companies in the streaming economy. This not only refers to the three major ones, but also includes independent music digital rights agency Merlin for independent music labels and independent musicians. Direct music licensing is not good for independent musicians. Therefore, the report concluded that “streaming media platforms need to be completely restarted.”

During the investigation phase, former Spotify chief economist Will Page submitted a piece of evidence to prove that between 2015 and 2019, the major record companies in the UK were affected by the development of streaming music and their turnover increased by 21%. “The business of recording music has not only become larger, it has also become more profitable for record companies. However, musicians have not received a proportional return.”

It’s time to investigate the unrevealed industry distorting reality

△ According to the PayPerFormers movement survey, British musicians’ income from streaming media platforms in 2020

In addition, the report also pointed out that there is a lot of unfair competition in the market. For example, UGC platforms like YouTube have an unfair advantage over other platforms due to the safe haven principle, and independent music faces large music companies. The monopoly position cannot compete on an equal footing and so on.

Of course, this report is not only an attack on big companies, but it also calls on the government to introduce more compulsory policies to normalize the management license of UGC content platforms. In addition, the report also recommends that the government support the British Recording Industry Association to set up cultural institutions overseas to support the development of British music and creative industries overseas, such as touring.

Council Chairman Julian Knight expressed her concern about market monopoly. When streaming media platforms rely on the recording music industry to make a lot of money, the performers and songwriters behind them are not paid. I am afraid that only through the law to restart streaming media, can we achieve a fair distribution of income.

The following are some of the key issues discussed in the report:

It’s time to investigate the unrevealed industry distorting reality

Playlist Payola

It’s time to investigate the unrevealed industry distorting reality

In the music industry, Payola refers to money transactions or other illegal acts of bribery carried out by record companies in order to play records on commercial radio stations. Songs that pass through Payola will be played as part of normal broadcasting. Money transactions.

According to US law, radio stations must disclose their paid songs as sponsored playing time, because the number of times a song is played can affect the perceived popularity of the song.

The result is obvious. Once there is bribery, in order to protect their own interests, each family has to participate in bribery, which will bring vicious competition, which is bound to be detrimental to the development of the entire industry.

Nowadays, radio is no longer popular, and song lists, charts, and platform algorithms have inherited the role of radio to some extent and have become an important way of promoting songs.

According to the DCMS report, music streaming platforms often encourage musicians to pay for marketing in order to get more promotional opportunities on the playlist.

For example, at the end of last year, Spotify also launched a new “exploration mode” that allows musicians to lower their royalty rates in exchange for their exposure in certain song stations and auto-play modes, which is considered by many to be Payola behavior.

It’s time to investigate the unrevealed industry distorting reality

Market monopoly

It’s time to investigate the unrevealed industry distorting reality

According to the report, “The government must be convinced that the British law does not allow market monopoly. This means that independent labels must be supported to challenge the market monopoly of major record companies, and creators must be able to ensure that they have a contract when signing a contract with a music company. Negotiation ability close to the latter.”

However, BPI and major record companies said that this is mainly because the current music industry is still rampant in piracy and copyright infringement.

It’s time to investigate the unrevealed industry distorting reality

△2014-2020 the proportion of the population who illegally download music in the UK

It’s time to investigate the unrevealed industry distorting reality

Safe Harbor Principle

It’s time to investigate the unrevealed industry distorting reality

The report also discussed the safe haven principle. The “safe harbor” principle means that when a copyright infringement case occurs, when an ISP (Internet Service Provider) only provides space services and does not produce web content, if the ISP is notified of the infringement, it has the obligation to delete it, otherwise it is regarded as an infringement . If the infringing content is neither stored on the ISP’s server, nor informed which content should be deleted, the ISP shall not be liable for infringement.

The safe haven principle has become the advantage of UGC platforms such as YouTube. Even if there is infringing content, the platform has the obligation to delete it only after being notified, without having to bear other responsibilities. As a result, YouTube’s cost of content infringement is much smaller, which also makes record companies more dissatisfied.

The report said, “a profound impact on the principle of a safe haven in English law the number of words in music consumption market .YouTube music streaming market monopoly demonstrated tilt the market.”

It’s time to investigate the unrevealed industry distorting reality

User-oriented income distribution

It’s time to investigate the unrevealed industry distorting reality

It’s time to investigate the unrevealed industry distorting reality

△ Revenue distribution of streaming media platforms

The discussion on the mode of income distribution is also one of the focuses of this survey. At present, music streaming media platforms are mainly based on the market-oriented distribution model (pro-rata). In the survey meeting, the user-oriented new income distribution model caused a lot of controversy. Regarding which is better and which is inferior, Music Finance has introduced it in the previous article (extended reading: How much music streaming platform should be allocated to musicians? ).

Interestingly, it is the Association of Independent Music (Association of Independent Music) that opposed this approach, and streaming media platforms such as Deezer and SoundCloud have moved toward user-oriented income distribution.

In this regard, everyone did not reach an unanimous conclusion in the end, but the lawmakers clearly saw that the user-oriented income distribution model has its advantages, but it also does not mean more fairness.

The report commented that there is a fierce dispute about the currently widely used market-oriented income distribution model and its alternatives, such as the user-oriented income distribution model. Streaming media platforms are creating new ways to solve the concerns of creators and consumers about the fairness and transparency of streaming media platform royalties, which is very good. “However, we are also worried that if the current contractual agreements between major record companies and streaming media are abused, it will stifle future innovation. CMA needs to consider whether these agreements will or have hindered streaming media experimentation and innovation.”

At present, CMA has responded to the published report, saying that it will carefully review the CMA’s recommendations in the report. And CMA has intervened to investigate Sony’s acquisition of the independent label AWAL in May.

A government spokesperson also told the media that it is currently collecting evidence through an investigation project to understand the income of creators of streaming media platforms, and will consider publishing the results in the next few months.

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