“European Parliament Overwhelmingly Backs Reforms in Music Streaming Royalty System”
On January 17, the European Parliament voted decisively in favor of transformative changes to the music streaming royalty landscape, aiming to establish fairness, sustainability, and cultural diversity in the industry. The resolution, endorsed by 532 votes to 61 with 33 abstentions, seeks to address the existing imbalance in revenue distribution, particularly affecting authors and performers who receive inadequate compensation. The Parliament calls for a new legal framework in the EU for music streaming royalties, emphasizing the dominance of streaming services in music consumption. Proposed changes encompass the visibility of European works, transparency in AI usage, and support for musical diversity.
The Parliament criticizes the current pre-digital royalty rates and condemns payola schemes that force creators into accepting minimal or no revenues in exchange for increased visibility. The resolution urges EU intervention to ensure the prominence and accessibility of European musical works amid the vast content available on streaming platforms. The MEPs consider measures such as quotas to enhance visibility. The bill is proposed to make algorithms and recommendation tools on platforms transparent to prevent manipulation of streaming figures that may affect artists’ earnings. The introduction of a label indicating AI-generated songs is suggested, and concerns about unauthorized deepfakes are highlighted.
Additionally, the legislation should mandate streaming platforms to correctly allocate metadata to identify rights holders and enhance the visibility of their works. The MEPs emphasize the inclusion of diversity indicators to assess the range of genres, languages, and the presence of independent authors. Noting that a significant portion of streaming revenues benefits major labels and a select group of popular artists, the MEPs advocate for a European industrial strategy promoting diversity and supporting smaller players in the music sector.
Rapporteur Ibán García del Blanco, S&D, Spain, emphasizes that the Parliament is addressing the concerns of European creators, underscoring the importance of cultural diversity, fair payment, and transparent algorithms and AI tools in music streaming services.
The European Parliament highlights that digital music platforms and music sharing services offer access to up to 100 million tracks either for free or at a low monthly subscription fee. Streaming constitutes 67% of the global revenue in the music sector, with an annual revenue of $22.6 billion.
