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CMU@TGE Top Ten Questions: Where does all the streaming money go?

By | Published on Thursday 4 May 2017

Where does all the streaming money go?

In the run up to this year’s CMU Insights @ The Great Escape conference, we will go through the top ten questions we will be answering during this year’s programme. Today: Where does all the streaming money go?

Whereas iTunes was, in some ways, simply a digital version of the record shop, streaming is a fundamentally different business model. That makes the way streaming services pay artists and songwriters somewhat complex. Which is why the Music Managers Forum commissioned CMU Insights to produce the ‘Dissecting The Digital Dollar’ reports, to help artist managers understand how the model works.

The deals done between the labels, publishers, collecting societies and the streaming services are – at their core – revenue share arrangements based on consumption share.

So each month, Spotify works out what portion of total streams were Universal Music recordings, allocates that portion of its overall revenues to the major’s catalogue, and then pays it a share of that money according to its revenue share agreement – Universal will likely get somewhere between 55% and 60%. Though that said, a series of minimum guarantees Universal has also secured from the streaming service may mean it gets more of the cash. How artists are paid then depends on their contracts with the record company.

On the publishing side, because a stream exploits both the reproduction and communication controls of the copyright, in the UK some of the money will flow through the publisher, who will then pay the songwriter a share. Some will flow through PRS, who will usually split that money between publisher and writer. So as a songwriter, neither your publisher statement nor your PRS statement will tell the complete story.

It’s a bit confusing isn’t it? Then you add in the fact that the specific figures in each streaming deal are a secret. In The Royalties Conference at The Great Escape we’ll explain in a little more detail how all this works, while licensing expert Becky Brook will come at the whole thing from the perspective of the streaming service.

At the end of the day, we’ll put the spotlight on the transparency debate, why are there so many secrets, and why is that a problem? MMF CEO Annabella Coldrick will join that debate alongside artists Dave Rowntree (representing the Featured Artists Coalition), Crispin Hunt (representing BASCA) and Suzanne Combo (representing the International Artists Organisation).



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