Ivan: 0:00

Hello and welcome again to The Bench Report. You're listening to Amy and Ivan. Today we're looking at some really crucial developments that are reshaping the UK music industry. Specifically, we're focusing on how artists get paid in this age of streaming. We want to unpack these quite complex changes and figure out what they mean for the creators behind the music.

Amy: 0:23

And it's a topic that affects, well, pretty much everyone, not just musicians. Music is so central to our cultural identity and it's a serious engine for economic growth too. I mean, the UK is a genuine global music powerhouse. We're the third largest market worldwide and the second biggest exporter of recorded music. So keeping the sector healthy, that's about supporting a really vital part of our national fabric and our economy.

Ivan: 0:46

Absolutely. So the main aim today is to is to understand how these new industry agreements are supposed to ensure artists get a fairer slice of streaming revenue. It's about tackling those longstanding worries about the system, kind of leveling the playing field, you could say. So let's just set the scene a bit. Music isn't just background noise, is it? It's a cornerstone of the UK's creative industries. And that whole sector has been flagged by the government as a priority for growth, really important for our economic future. It's central to a new 10-year plan for the creative industries. And that includes, well, a pretty significant funding boost. Government funding is more than doubled. It's now 10 million pounds a year for the next three years.

Amy: 1:28

And that money is specifically aimed at helping UK artists succeed, you know, both at home and abroad and crucially also nurturing that grassroots music scene, which is where everything starts.

Ivan: 1:38

It really is.

Amy: 1:38

But the whole landscape, it's just fundamentally changed. Think back to 2001 when the first streaming service launched. That started a massive transformation in how we all consume music. Suddenly, millions of songs were just there at our fingertips. But, and this is the key thing, it also completely altered how musicians earn a living. Streaming now makes up the vast majority of music revenue, which on the surface sounds great. Yet it created this strange paradox. Listeners have amazing access, but artists often find it incredibly hard to make ends meet from their streams.

Ivan: 2:12

That's struggle. Despite the huge reach streaming offers, it really points to a basic problem with the old way of doing things, doesn't it? We've had that stereotype of this starving artist for so long. How do these new measures try to move past that to make sure that new musicians, new generations can actually build a sustainable career?

Amy: 2:30

It's about trying to build an industry where creativity genuinely pays off. And this move towards industry led solutions. Well, it didn't just happen overnight. It really got going after the culture, media and sport committee published that influential report on music streaming back in 2021. That report really put the issues under the spotlight and prompted some serious action. It laid the groundwork politically and economically.

Ivan: 2:56

Right. I remember that report making waves. And following that, we saw other key steps being taken. The Competition and Markets Authority, the CMA, did a market study into music streaming. And interestingly, they reported finding no evidence that publishing revenues were being deliberately suppressed. In fact, they found the share of streaming money going to publishers and songwriters had actually gone up from about 8 percent in 2008 to 15 percent more recently.

Amy: 3:20

Which was perhaps slightly counterintuitive to some of the narrative at the time. And alongside that, the Intellectual Property Office did its own research looking into potential copyright changes.

Ivan: 3:29

So the evidence base was building.

Amy: 3:30

Exactly. And all that preparation led to the creation of the Creator Remuneration Working Group that was launched in spring 2024. Its specific job was to explore actions the industry itself could take on how creators get paid from streaming. The minister for creative industries actually chaired those meetings and reports suggest they involved some, let's say, difficult discussions. I can imagine. But ultimately, they managed to hammer out the significant agreement. It wasn't imposed. It was negotiated.

Ivan: 3:59

And that brings us right up today to this core milestone announcement. UK record labels represented by the BPI and AIM, the Association of Independent Music, have agreed to a new set of principles. And the headline figure is that these are expected to deliver tens of millions of pounds of new investment to support UK artists by 2030. That sounds like a lot of money, but what does it actually mean on the ground for an artist?

Amy: 4:21

Well, it's more than just a big number. It signals, potentially, a strategic shift for the industry. It could change the financial risk for Both new and established, perhaps allowing more diverse voices to build careers without needing huge instant hits. And what's really interesting is the commitment from the big three labels, Universal, Sony and Warner. They've agreed not just to adopt the principles, but also to introduce bespoke packages that suggest a more tailored approach, not one size fits all.

Ivan: 4:51

OK, bespoke packages.

Amy: 4:53

And meanwhile, the independent labels are encouraged to offer support that's appropriate for their scale. recognizing they operate differently.

Ivan: 5:01

Let's break down what this new deal actually offers different groups of artists. This is where it gets really practical. First up, legacy artists. These are the performers who signed deals before streaming was the main way people listen to music. They often got stuck with really low royalty rates, maybe 8%, 11%.

Amy: 5:16

Sometimes even lower, yes.

Ivan: 5:17

And the new principles aim to disregard unrecooped advances.

Amy: 5:21

Can

Ivan: 5:21

you just explain what an unrecooped advance is and why getting rid of that is such a big deal?

Amy: 5:26

Sure. So an advance is basically money paid up front to an artist by the label. It's intended to be paid back or recouped from the artist's future royalty earnings. Now, unrecouped means the artist hasn't yet earned enough royalties to cover that initial advance. For legacy artists, this often meant that even if their songs were being streamed millions of times, they saw zero income because they were technically still in debt to the label for an advance given maybe decades ago.

Ivan: 5:54

Right. Perpetually paying off an old debt.

Amy: 5:56

Exactly. So disregarding these unrecouped balances isn't just the label writing off debt. It means potentially unlocking actual income for these artists from their streaming activity, maybe for the first time. It fundamentally changes their financial reality regarding their older work.

Ivan: 6:11

That's huge.

Amy: 6:12

It is. And beyond that, the principals also mentioned bespoke support to help boost their streaming presence now and importantly, much clearer terms if they renegotiate their contracts. This could see their digital royalty rates climb towards 20 percent, maybe 25 percent even 30 percent. That's a massive potential uplift.

Ivan: 6:32

Okay, a really significant change for them. Now, what about the people writing the songs, the songwriters? What's in this for them?

Amy: 6:39

This is quite a breakthrough. For the first time, major labels like Warner UK and Universal UK have committed to paying per diems. That's a daily allowance set at 75 fives per day, plus expenses for songwriters working on projects. It's direct payment for their time.

Ivan: 6:55

Not an advance.

Amy: 6:56

Not an advance in the traditional sense. And Sony UK is doing something similar, partnering with the Ivers Academy on a new support program for songwriters. And crucially, payments from that program won't be treated as recoupable costs against the songwriters main advance.

Ivan: 7:10

Ah, so it's extra support that doesn't add to their debt.

Amy: 7:13

Precisely. It means more immediate money in their pockets, which is a big win.

Ivan: 7:18

And finally, what about session musicians, the players who contribute to recordings but aren't the main artist?

Amy: 7:24

Well, they already secured an increase in their session fees. That was agreed late last year. And now there's a new commitment to review how they earn money from broadcast and public performance uses so when recordings they played on get radio play or are used in public spaces. It is It is worth saying, though, that some concerns apparently still remain for session musicians. There's another meeting scheduled for early September to try and address those specific points.

Ivan: 7:49

OK, so ongoing discussions there. And it's important to remember these principles don't exist in a vacuum, right?

Amy: 7:55

Not at all. They're designed to complement other industry agreements that came out in 2024, focusing on transparency and metadata. So it's part of a wider effort, better pay, but also clearer information and better data management, which ultimately should should help creators track and receive what they're owed.

Ivan: 8:12

Makes sense. It all needs to work together. So we have these principles agreed. How do we know if they're actually working? How will progress be tracked?

Amy: 8:19

The government intends to work very closely with that creator remuneration working group we mentioned earlier. That group includes the Council of Music Makers, which brings together all the key creator organizations, FAC, Ivers Academy, MMF, MPG, Musicians Union. The plan is for them collectively to set up a solid monitoring process to really evaluate how effectively these principles translate into better earnings for artists.

Ivan: 8:45

And what if, after all this, the voluntary approach just doesn't deliver enough change? Is there a plan B?

Amy: 8:52

Yes, and this is quite important. The government has committed to formally reviewing the whole package in 12 months. That's actually sooner than the 18 months some had suggested.

Ivan: 9:00

Okay, a year's time.

Amy: 9:02

And they've explicitly stated they reserve the right to bring in legislation if these voluntary measures don't hit the mark. That could mean something like an equitable remuneration clause, similar to what exists in the EU, which mandates a certain share of revenue goes directly to performers.

Ivan: 9:17

So there's a potential legislative stick behind the voluntary carrot.

Amy: 9:20

You could put it that way. It definitely keeps the pressure on the industry to make these principles work effectively.

Ivan: 9:25

But even with this progress, it feels like there are still some pretty big challenges lingering, things that were raised during the debate. One issue is this idea of independent oversight. How do you guarantee consistency across the whole industry, from the global majors down to tiny indie labels?

Amy: 9:43

That's a fair question. Ensuring consistent application and enforcement without a formal regulator is certainly a challenge in any voluntary scheme.

Ivan: 9:51

And then there's the the huge question mark over AI, the AI tsunami, as some are calling it. That poses a massive potential threat to creative livelihoods, doesn't it? Yeah. With all the complex issues around copyright, data mining.

Amy: 10:05

Absolutely. The government is doing research on it, but it's a fast moving and potentially disruptive force for the entire creative sector, not just music. How the economic models adapt or fail to adapt is a critical question.

Ivan: 10:16

And another tricky point is that the fundamental economics of streaming, how the money flows from Spotify or Apple Music to the labels in the first place, that's largely set by international agreements.

Amy: 10:28

That's right. It makes it very difficult for one country, even the UK, to unilaterally change that core payment structure between platforms and rights holders.

Ivan: 10:37

And when you hear statistics like the Musicians Union saying over half their members earn less than £14,000 a year, it really underlines how vital these improvements are, but maybe also how much further there might be to go.

Amy: 10:50

It does paint a stark picture, and it reinforces why looking beyond just artists' deals is important, too. Supporting the whole ecosystem matters. For instance, that push for a one-pound levy on big arena tickets to funnel money back into grassroots music venues. The Royal Albert Hall is the first major venue to adopt it.

Ivan: 11:07

That seems like a really practical way to help nurture talent at the base level.

Amy: 11:11

It does. And connecting back even further, you have the importance of creative education in schools. You need that pipeline of talent coming through. It's all interconnected.

Ivan: 11:19

So wrapping this up, it seems these new principles definitely offer some real real positive potential, a chance to improve things significantly for many UK artists. It feels like a major step forward. But as you've highlighted, it's clearly not job done. Ongoing effort and watching brief seem essential.

Amy: 11:37

Absolutely. It's progress, but the story isn't over. And perhaps thinking about all this, it's worth considering your own relationship with music. How do your listening habits, streaming, buying physical copies, going to gigs, how might they fit into this bigger picture of artist compensation? And maybe it prompts the question, what else might be needed down the line to find that perfect balance between fair pay for creators and the amazing access we all now enjoy? A

Ivan: 12:03

thought-provoking question indeed. As always, find us on social media at BenchReportUK. Get in touch with any topic important to you. Remember, politics is everyone's business. Take care.