IFPI Chief Executive Frances Moore tackles the debate on artist remuneration
The IFPI’s Chief Executive Frances Moore has addressed in a blog post a hot topic in the music industry today - given the continued momentum of streaming services - artist remuneration vs record label reveues.
The critics claim that the growth in streaming services revenues has benefitted labels more than it has artists, who have not seen a corresponding increase in their royalty statements.
The IFPI’s research, which has been independently verified by BDO LLP, found that the decline in artist payment - whilst a reality - was smaller than the reduction in labels' sales revenue.
This means that according the the IFPI artists’ revenues increased as a proportion of the labels’ revenues over the past five years. In actual numbers and taking into account a sample of 18 markets worldwide that increase has been of 13%.
The IFPI goes on to point to the more likely culprit of artists’ revenues declining: the shrinking of the overall recorded music market, pointing in the direction of user upload platforms like YouTube and SoundCloud, as well as piracy as the key reasons.
Moore also observes that in markets such as Sweden the local artists have seen payments increase by 111% and producers have seen a 47% increase, implying that as streaming becomes ubiquitous in other territories there will be corresponding increases in artists' revenues.
Interestingly, Moore does not contest the figure that has circulated recently, stating that 50% of revenues from streaming services end up with record companies, but debates that these figures do not take into account the investment made by record labels into fostering and marketing new talent.
Obviously, given that Moore is the IFPI's Chief Executive, and the IFPI works for the recording music industry, her arguments are clearly geared towards making labels look like the good guys, however it is good to see the IFPI acknowledge the debate in the first place and it leaves room for artists and their representative to prepare a counter-argument, should they wish to.
The biggest issue today is the fact that in spite of the verified numbers quoted by the IFPI there is little evidence to show exactly what is happening to the distribution of streaming services royalties on a wider scale, and to show whether labels are taking advantage of this confusion in any way or not.
Still, as artists become more sophisticated about their revenue streams and more willing to share their finances with the word, and the platforms being developed by companies like Kobalt are making transparency the n.1 concern for the industry, one would hope that over the next couple of years the clouds will clear and there will be easier ways to determine the percentage of streaming revenues that end up in the artists’ pockets.
(Andrea Leonelli)