EU told to oblige streaming platforms to revise pre-digital royalty rates

MEPs want rules to regulate the streaming platforms that dominate the music market, by obliging them to make their algorithms transparent and help right-holders get their music discovered.

In a resolution that will be finally voted upon in the European Parliament, MEPs will ask the EU to invest more in European music, including local and niche artists or artists from vulnerable communities to offer a more diverse repertoire, as well as to support authors in the digital transformation of their business models.

Digital music platforms and music sharing services currently provide access to up to 100 million tracks either for free or for a comparatively low monthly subscription fee. Streaming represents 67% of the music sector’s global revenue, with an annual revenue of $22.6 billion.

By a majority of 23 votes to 3, the EP’s Culture Committee called for EU rules to ensure a fair and sustainable environment for music streaming, and for imbalances in the sector to be addressed, as they currently leave a majority of authors receiving very low revenues.

The “pre-digital royalty rates” currently applied must be revised, they say, condemning the payola schemes that force authors to accept lower or no revenues in exchange for greater visibility.

“The success story of music streaming services has its own paradoxes. The majority of authors and performers, even those with hundreds of thousands of reproductions each year, do not receive remuneration that allows them to afford a decent living,” said lead MEP Ibán García Del Blanco (S&D).

“It is of paramount importance to recognise the role authors play in the music sector, review the revenue distribution model that streaming services use and explore proportionate and efficient solutions, to promote cultural diversity.”

The situation is aggravated by the decline in the overall value of music products, with revenues concentrated in the hands of major labels and the most popular artists, the rise of AI-generated content and, according to studies, streaming fraud – bots manipulating streaming figures – and manipulation and illegal use of music content by platforms.

MEPs will call for an EU bill to oblige platforms to make their algorithms and recommendation tools transparent and to guarantee that European works are visible and accessible.

They said it should also include a diversity indicator to assess the array of genres and languages available and the presence of independent authors.

They also want rules that oblige streaming platforms to identify right-holders via the correct allocation of metadata to help their works to be discovered, as well as to prevent streaming frauds that are used to reduce costs and lower value.