This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Business News Digital Education & Events Labels & Publishers Legal The Great Escape 2015
Tackling the Digital Pie Debate
By CMU Editorial | Published on Monday 1 June 2015
Back to our post-event coverage of this year’s CMU Insights @ The Great Escape, which will continue during this month, and in the latest edition of the CMU Trends Report we summarise the big Digital Pie Debate, which was definitely one of the livelier discussions at the conference this year.
In the article, CMU Business Editor Chris Cooke explores the three strands of the debate over how income from the rapidly expanding streaming services is shared – the DSP v label split, the label v publisher split, and the label v artist split.
On the first strand he writes: “We know that, in the main, the Spotify-style streaming services are keeping about 30% of their revenues, paying over the other 70% to the music rights industry. This is very much an approximate figure, and in the early days a streaming service will likely be paying more to the labels and publishers than it’s total revenues, as it pays out minimum guarantees and advances before the revenue share element of its deals kick in. But in the main, the 70/30 split is the arrangement”.
“There are some in the music community who reckon that the streaming services, being so reliant on songs and recordings, should actually pay more than 70% of their revenues over to the music rights owners. In the main, the DSPs are resistant to this proposal. And a report published earlier this year by the UK’s Entertainment Retailer’s Association, which counts the key digital firms among its membership, contained the quote: ‘70% is tough enough, but at 80%, we would have to shut up shop. Somebody should explain that 80% of nothing is… nothing'”.
“That said, since Jay-Z led the acquisition of Tidal, he has indicated that his streaming platform plans to pay 75% of its income to the rights owners, so perhaps there is some room for manoeuvre. Though as Spotify and Deezer start to expand their consumer offer to include speech and video content, and programming commissioned by the DSP themselves, it could be that down the line the streaming firms actually seek to push the split the other way”.
Premium CMU subscribers can read the full article in the latest CMU Trends Report, the link for which was sent out by email on Friday. Alternatively you can read it online here using the password published in today’s edition of the CMU Digest. To become a premium CMU subscriber for just £5 a month click here.
