The EU Wants to Make Music Streamers Boost Artist Payouts

Lawmakers are considering a legal framework that will specifically help better compensate smaller artists.

Photo of a small concert
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European lawmakers are sick of streamers getting artists’ work for a song.

On Wednesday, members of the European Parliament overwhelmingly voted to form a new framework for how artists are compensated by streaming platforms. Nothing with any legal teeth was decided, but this is a first step toward a new law. 

You Know How This One Goes

Artists haven’t been shy about saying they’re getting ripped off by music streaming companies. According to digital music distribution company Ditto, Spotify pays between $0.003 and $0.005 per stream, so for smaller artists that adds up to… sorry, just doing the math here… ah yes, a pittance. Even big stars have beefed with the services — Taylor Swift had a very on-again-off-again relationship with Spotify up until 2017.

The EU is trying to juice up the royalty checks for lesser-known artists and, depending on the final legislation, that could align with the commercial interests of the big record labels:

  • Bloomberg reported earlier this month that Universal Music is bracing for big cuts, as the streaming boom has slowed. But Universal isn’t the only one suffering: Music fund Hipgnosis offloaded almost half a billion dollars in streaming rights last year as their value slumped. 
  • Universal CEO Lucian Grainge has been lobbying streaming companies to adopt “artist-centric royalties.” Meanwhile, Spotify has tried to rejig how it distributes royalties by cracking down on so-called “white noise” tracks, demonetizing those streams so more money can go to artists making actual music.

Experience Economics: In a memo to Universal staff this month, Grainge also hinted that the label will try to tap into the experience economy by “strengthening the artist-fan relationship through superfan experiences and products,” adding the company is “already in advanced discussions with our platform partners.” Exactly what these products are is anyone’s guess, probably including the artists themselves…