New figures released yesterday at Canadian Music Week by the BPI – the record labels’ organization that promotes British music – highlight the growing “Value Gap” that exists between consumption of music in the UK and the amount that record labels and artists receive in revenues from video streaming platforms.
Geoff Taylor, BPI Chief Executive, told delegates that the number of people streaming music in the UK doubled in 2015, resulting in a 70 per cent increase in payments from services such as Spotify and Apple to record labels, helping to propel the market to overall growth.
However, while UK streams of music videos almost doubled during the same 12 month period, the revenues paid to labels for those streams flat-lined, rising by less than half of one per cent. This disparity neatly encapsulates the market distortion characterised by the IFPI as the “Value Gap”.
Taylor added: “The rising flow of royalties that should be nurturing artists and labels has slowed to a trickle, as platforms that rely on safe harbours use consumer demand for our music to grow their own businesses at the expense of creators.”
Frances Moore, CEO, IFPI, gave the keynote speech on the ‘State of the Global Music Industry’ in which she referred to the findings of IFPI’s recently released Global Music Report, which showed that the music industry grew in 2015 for the first time in almost two decades, with digital revenues overtaking physical revenues for the first time.
Addressing the conference, Moore said: “We are at an extraordinary moment in our global business. Music is being consumed at unprecedented levels. Measurable growth is being achieved for the first time in nearly two decades.
“Yet the job of turning around the global music industry is really only just beginning and the scale of the anomaly to be fixed is huge. Music is driving economic activity and digital commerce. Yet, in terms of the value being returned to its creators and investors, music is massively undervalued.”
Cary Sherman, Chairman and CEO, RIAA, said: “DMCA reform has become an international phenomenon. Thousands of artists, dozens of music organizations and managers are speaking out and it’s beginning to make a difference. The fundamental unfairness of our existing laws, the stature of artists and power of music, is breaking through like never before.”
Graham Henderson, President and CEO, Music Canada, said: “The value gap is a striking example of how wealth has shifted from those who create content – our artists and their partners – to the large companies that build their platforms on that content. Creators are worse off today than they were when digital came into their lives. This is disturbing and was avoidable. Policy makers now have the opportunity to rebalance the framework in such a way that creators are fairly compensated.”
Dan Rosen, Chief Executive, ARIA, said: “The local Australian music business has done a great job in embracing new digital platforms, giving fans unprecedented access to the music they love. However, we need to ensure that the policy environment reflects the true value that music provides to digital services and allow money to flow back to the artists and labels to sustain a healthy ecosystem of creativity.”