On June 1, 2021, the World Intellectual Property Organization (WIPO) published a report studying the 'Artists in the Digital Marketplace: Economic and Legal Considerations' prepared by Christian Castle and Professor Claudio Feijóo.
The key takeaway from this report is clear. The revenue generated from streaming music is distributed disproportionately, with non-featured performers getting nothing and featured performers getting almost nothing.
They summarise this streaming imbalance clearly:
"The recorded music business has radically changed since the WIPO Internet Treaties. Commercial and technological drivers of change have been on an accelerated pace since Napster. The trend has been particularly pronounced over the last five years driven by the dominant music streaming platforms, such as Apple Music and Spotify. Spotify’s 2018 direct public offering as a “pure play” music service demonstrated the value of the recordings created by performers and did so with disproportionately little revenue paid to featured performers and no revenue paid to non-featured performers. These market forces have exposed a pronounced imbalance between the significant market benefit to streaming music platforms derived from the world’s performers compared to the relatively scant financial benefit received by these same performers. The systemic imbalance is particularly acute for non-featured performers. This study analyses some of its causes and, after examining different alternatives, suggests a path forward to require an additive payment to both featured and non-featured performers paid by streaming platforms as the best option possible."
Castle and Feijóo then walk through various solutions to this issue and place a clear emphasis on being able to reach equitable remuneration without disrupting the current contractual relationship between producers and performers. The report underlines one particular mechanism - a remuneration right with mandatory collective management: "It seems that the policy goals and principles of equitable remuneration are best fulfilled by a streaming remuneration in the nature of a communication to the public royalty that is outside of any recording agreement, is not waivable by the performer and it is collected and distributed by performers’ CMOs."
The solution is clear. In order for performers to achieve fair and equitable remuneration, their rights need to be managed by their collective management organisations (CMO). This is identified as the best option to effectively put money directly in the pockets of performers.
You can download the full report right here: https://www.payperformers.eu/facts-figures