Last week, London-based trade body Artists, Managers, Performers (AMP) - a loose alliance between U.K. organizations the Musicians’ Union (MU), the Music Managers’ Forum (MMF) and the Featured Artists Coalition (FAC), which collectively represents over 35,000 U.K. artists, performers and managers, called for streaming royalties to be split equally between the artist and the label. According to AMP, who has issued a submission to the EU consultation on copyright, the current standard practice of labels paying streaming royalties on a a minority percentage based on a retail sales model is unfairly weighted against the artist. Speaking exclusively to Billboard, British Musicians’ Union assistant general secretary and AMP spokesperson Horace Trubridge outlines his argument why artists should receive an equal split on streaming royalties and why the major labels need to "stand up and be accountable."
Billboard: Firstly, what is AMP and when was it formed?
Horace Trubridge: “The Musicians’ Union has always had regular talks and discussions and shared interests with the MMF and the FAC. We’ve just recently decided that we would like to formalize that arrangement. Going forward there is going to be regular monthly meetings between the three of us and we will be acting jointly on certain issues, which is what we’ve done in respect of the EU copyright consultation that is taking place at the moment. Copyright and, in particular the payment of streaming royalties, is an issue that all three organizations feel very strongly about.
AMP argues that the current standard practice of paying streaming royalties is unfairly weighted against the artist as, according to current copyright legislation, they are paid on a sales basis, not a performance one. What changes do you propose?
Under copyright law, streaming services, we are told, are defined as "making [music] available" and not "communication to the public" and we are uncomfortable with that definition. We will be seeking further leading counsel advice on this issue as it is crucial in our argument that streaming is not a sale. In practical terms, when people stream music they don’t feel like they would if they downloaded it from iTunes or Amazon or bought a CD. It feels much more like radio and yet the record labels treat streaming income as if it is a sale. That doesn’t feel right to us and we don’t think it feels like that to consumers either. The second issue is that the labels don’t have any of the old associated costs of manufacture, storage and distribution with streaming that they used to have with CDs. Yet they apply the same kind of logic to artist payments as if it was a sale. We don’t think that’s right. When you are just handing over a sound file to Spotify or whoever, where’s all the huge costs that justify paying a 12% royalty.
But even without manufacture, storage and distribution, labels still have to make a considerable investment in artist development, licensing and data management.
But the vast amount of music that people are streaming is old catalog and there is no investment there at all. There are no marketing costs in any of that. The investment was either recouped or lost years ago. It’s only with new acts where there is that investment and, hopefully, the new acts, when they sit around a table with a label are negotiating a decent deal for themselves on streaming. We’re saying that the actual consumer experience is not like a purchase, but more importantly, the record companies are paying as if they still have all those associated costs—which they don’t.
Many independents already pay their artists a 50% split on digital revenues, so is this campaign aimed predominantly at the major labels?
We are aiming this at the majors, yes. The fact that indies can do 50/50 suggests to us that, well, why can’t the majors? Artists signing a deal today are probably much savvier about digital services and what they think is a fair share. But what about all that old catalog? The majors licensed that stuff to these digital services, yet we have no idea what they received in payments upfront because it’s all subject to NDAs. All I definitely know is that when I look at my royalty statement from Warner, for the band that I was in in the 1970s [Darts] I see that I’m getting 12% of what Warner are receiving from a streaming service and I think that’s outrageous. Warner acquired my band’s catalog from an indie label. They never spent a penny on marketing or made any investment in us. Yet they think it's fine to take 88% of the money that they receive from streaming services.
AMP has issued a submission to the EU calling for them to investigate streaming royalties. What happens next?
It’s now for the EU to consider. They need to look at the legal position regarding streaming and decide whether it’s fair to interpret streaming as a sale. We also questioned why there are still royalty deductions for packaging and breakages and returns on digital. That’s absurd. We know that there are no breakages, returns. or packaging. So why on earth are these royalty deductions still in contracts? We also don’t think that the assignment of copyright for life is fair. We think that should be 25-30 years, maybe. We all know that Brussels moves with the speed of a fully loaded oil tanker, but it is important that we make our voice heard.
What are your views on so-called ‘Black box’ revenue – upfront payments that labels have historically received from third parties, such as streaming services, which are not then passed on to the artists?
I challenged somebody who I’m not going to name about this the other day and they said, ‘If the artist wasn’t contractually entitled to any of that money then why would they have it?’ Which I thought was an extraordinary response. It’s not ethically correct and they try and justify it because the artist wasn’t contractually entitled to any of it. But exactly how much money was it? Also, if I’m a digital aggregator and I come to you and say, ‘I want to license your catalog.’ And you say to me, ‘That’s fine. Let’s talk about how much money you are going to pay me upfront just to access it. Then let’s talk about payment per stream.’ Then how much I pay you per stream depends very much on how much money you want me to give you upfront. If you want a whole shed-load of money upfront then I am not going to pay you as much money per stream, so again the artist is suffering.
If you are successful in your call for 50/50 streaming royalties will you be looking for back payments?
If the labels really want artists and fans to respect and value them then they need to take steps to put right the ills of the past which are still perpetuated today. Paying artists who signed record deals 15-20 years ago or more a 12% or less royalty on streaming services is simply indefensible. Why don't the labels voluntarily redress the inequities of the past by announcing they will agree to split streaming income 50/50 with any artist who signed a record deal before the advent of digital? That would at least be a start. I honestly think the major labels needs to consider doing something like that. They need to actually stand up and be accountable. They need to confess to all the areas where they have, in my opinion, not treated the artist fairly and they need to put it right. Now I’m not saying that we’re going to go back and claim all the money that artists were entitled to, or should have been entitled to, but I do think that there needs to be a cleaning of the slate. It’s not for the artist to go cap-in-hand to the record companies and ask for that. The labels, if they really want to be true to artists and respected and considered to be operating ethically in the 21st century, then they should just do this themselves.