Economics of streaming are ‘threatening future of music’, says Elbow’s Guy Garvey

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The three big music labels behave “like a cartel” in the streaming period, and the new arrangement is affecting the future of music in the UK, according to information presented on the first day of an investigation into the effect of streaming on the music industry.

During the New, Arts, Technology and Sport Review Committee on the Economics of Music Downloading, Members of Parliament heard from musicians like Ed O’Brien of Radiohead, Elbow’s Guy Garvey, and Tom Gray of Gomez, who painted a grim image of artists struggling to thrive.

Garvey claimed that the “system as it threatens the future of music,” while equal remuneration, greater accountability and user-centric streaming models were put forward as directions in which the market could be revamped and made fairer for musicians.

Gray, who is the founder of #BrokenRecord Campaign, said some artists were still tied to contracts that included antiquated clauses, such as a 10% damage clause, which saw labels work on the assumption that 10% of CDs would be broken in transport.

An artist’s share is then worked out from the remaining 90%, despite the fact in the streaming age barely any CDs are sold. Tom Frederikse, a solicitor and former producer, who also gave evidence, said in some cases the damage clause was as high as 25%.

“What’s very clear is over 70% of consumers think artists are underpaid. As soon as anyone sees this data and learns the terms of the payment deal, everyone comes to the same conclusion: it’s not right,” said Gray.

After hearing the evidence, Julie Elliott MP said it sounded as if the three major labels – Warner Brothers, Sony and Universal – were operating “like a cartel” because of what Gray called “suspiciously similar” artist contracts. Gray pointed to the latest YouGov study which showed that 77% of consumers felt that musicians were not having a good offer, and announced that, amid the global pandemic and economic crisis, Universal posted sales of $1.14 billion in the last quarter.

Members learnt that the massive profits seen by major labels did not fool artists who in the case of Nadine Shah, who also provided evidence, were struggling to make ends meet in the streaming period. Streaming was worth about £1 billion last year but the artists were estimated to have paid just 13 per cent of the money they generated.

The musicians said that the artists had to change to a subscription platform that had easily replaced the structure that existed when they were first signed.

O’Brien said that there were massive imbalances when Radiohead was signed in 1991, but that the streaming period had intensified them. “It’s fascinating to see your response to the testimony this morning because you’re becoming conscious of the inequality and opaqueness of the company, and then you’re bolting on this digital model. And it doesn’t work,”

Garvey said Elbow had recently shortened the intro of a track so that it would be more likely to appear on playlists. Gray told the committee that genres such as jazz and classical were struggling because their longer length tracks don’t suit the playlist system, which he said benefits easy listening and muzak.

Gray also told the committee he had heard of cases in which people who ran influential playlists on streaming platforms were being paid to include tracks, calling it a modern form of “payola”.

The inquiry continues and will hear the “perspectives of industry experts, artists and record labels as well as streaming platforms themselves”. The chair, Julian Knight MP, said the goal was to ask whether the business models used by major streaming platforms were “fair to the writers and performers who provide the material”. – Adapted from The Guardian

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