European Parliament Votes Resoundingly in Favor of Music Streaming Royalty Changes

Photo Credit: Alexandre Lallemand

On Wednesday, January 17, the European Parliament voted by a resounding margin in favor of changes to the music streaming royalty industry “to ensure the music streaming sector is fair and sustainable, and to promote cultural diversity.” The resolution was adopted by 532 votes to 61 with 33 abstentions.

The current music streaming market suffers from an imbalance in revenue allocation, leaving a majority of authors and performers with little compensation. Parliament calls for a new EU legal framework for the music streaming royalty sector, as streaming services continue to dominate as the primary method of accessing music. Among the other changes to be addressed include visibility of European works, transparency of AI use, and support for musical diversity.

EU Parliament says the “pre-digital royalty rates” currently in place must be revised, condemning the “payola schemes that force authors to accept lower to no revenues in exchange for greater visibility.”Further, MEPs assert that EU action is needed to “guarantee European musical works are visible, prominent, and accessible, among the ‘overwhelming amount’ of constantly growing content” across streaming platforms. MEPs propose to “reflect on the possibility” of imposing concrete measures, including quotas.

The EU bill “should oblige platforms to make their algorithms and recommendation tools transparent, to prevent unfair practices, such as manipulation of streaming figures, allegedly used to reduce artists’ fees.” MEPs suggest introducing a label that informs the public when a song has been AI-generated, and urge for “deepfakes” using identities, voices, or likenesses of artists without their consent, “to be tackled.”

“The rules should also oblige streaming platforms to identify rights holders by correctly allocating metadata to make their works more visible,” the MEPs add.Lastly, the EU legislation should include diversity indicators “to assess the array of genres and languages available and the presence of independent authors,” with the MEPs pointing to studies indicating that revenues in the streaming market go primarily to major labels and a handful of the most popular artists. They posit that a “European industrial strategy” for music should promote the diversity of the European music sector and buoy “smaller players.”

“The Parliament is giving voice to the concerns of European creators, who are at the heart of the music streaming market,” says rapporteur Ibán García del Blanco, S&D, Spain. “Cultural diversity and ensuring that authors are credited and fairly paid has always been our priority; this is why we ask for rules that ensure algorithms and recommendation tools used by music streaming services are transparent as well as in their use of AI tools, placing European authors at the center.”

European Parliament cites that digital music platforms and music sharing services provide access to up to 100 million tracks “either for free or for a comparatively low months subscription fee.” Streaming represents 67% of the music sector’s global revenue, with an annual revenue of $22.6 billion.