Streaming has added £3.5 Bn to UK music industry according to an ERA report to UK Parliament’s Digital, Media, Culture and Sport Committee enquiry into the economics of music streaming.
The submission explains that around 70% of revenues of streaming services are paid direct to the music industry via record companies, music publishers and collection societies.
“Streaming services typically have no direct financial relationship with artists or songwriters, and are not privy to those contracts,” it says.
It highlights that while record company profits are booming, “in contrast the streaming services are still in a long-term investment phase with the largest pureplay streaming company, Spotify, having cumulative net losses of $2.7bn.”
It points out that the margins of streaming services of around 30% are actually lower than those for retailers of CDs which are at around 38%. “This is despite the fact that DSP’s take on a larger marketing role in the streaming ecosystem, not just satisfying demand, but also helping drive it.”
“By returning to health a recorded music industry which was on the ropes thanks to piracy, and delivering literally billions of pounds of new money to the music industry, ERA believes the advent of on-demand streaming has been overwhelmingly positive for music and music fans alike and has enabled a greater number of artists and songwriters to be paid for their art,” it says.
ERA CEO Kim Bayley said, “We are delighted to have had the opportunity to engage with the DCMS committee and outline the benefits of the streaming revolution to fans and to music. Our members are proud of the job they have done in helping return the UK music industry to financial health, but we do not underestimate the concerns of artists and songwriters that too little of the 70% of revenue which goes to the music actually reaches them. We are hopeful that the enquiry proves a catalyst to help the music industry resolve this issue.”
The 21 page report is available to download here.
