Revenue distribution and transformation in the music streaming

Revenue distribution

and transformation

inthe music

streaming

value chain

December

2022

PERSPECTIVES

FOR THE DIVERSITY

OF CULTURAL

EXPRESSIONS

Published in 2022

by the United Nations Educational,

Scientic and Cultural Organization

(UNESCO)

7, place de Fontenoy,

75352 Paris 07 SP, France

This publication is available in

Open Access under the Attribution-

ShareAlike 3.0 IGO (CC-BY-SA 3.0 IGO)

license (http://creativecommons.org/

licenses/by‑sa/3.0/igo/). By using the

content of this publication, the users

accept tobebound by the terms

of use of the UNESCO Open Access

Repository (www.unesco.org/open‑

access/terms‑use‑ccbysa‑en).

The designations employed and the

presentation of material throughout

thispublication do not imply the

expression of any opinion whatsoever

on the part of UNESCO concerning the

legal status of any country, territory,

city or area or of its authorities, or

concerning the delimitation of its

frontiers or boundaries.

The ideas and opinions expressed

in this publication are those of the

authors; they are not necessarily

those of UNESCO anddo not commit

theOrganization.

Editorial team led by Toussaint

Tiendrebeogo, Chief of the Diversity

of Cultural Expressions Unit, with

the assistance of Lot Aoulad and

Gabrielle Thiboutot.

Cover photo:

Graphic design & cover design:

Corinne Hayworth

SHORT SUMMARY

“Since wars begin in the minds of men and

women it is in theminds of men and women

thatthe defences ofpeace mustbe constructed.”

PERSPECTIVES for the diversity of cultural expressions is a series of policy

briefs designed to inform and inspire discussions among Parties of the

2005Convention on the Protection and Promotion of the Diversity of

Cultural Expressions. Its objective is to identify and analyse emerging

trendsin thecreative sectors.

While music rights holders are collectively being remunerated

more than ever before, the (re)distribution of revenue in the

music streaming value chain remains extremely uneven

and opaque. When the COVID-19 pandemic curtailed live

performance opportunities, it became clear that despite

the success of music streaming, the great majority of

artists remain unable to rely on digital revenues alone to

sustain their livelihoods.

This policy brief provides a critical overview of the challenges

and opportunities posed by dierent revenue-sharing systems

for the music sector’s main stakeholders, including artists,

composers, labels, and distributors, while also identifying how these

systems, can have an impact on the diversity of cultural expressions more

generally. Building upon secondary research and interviews conducted with

a variety of industry experts, itsheds light on existing initiatives which serve

to improve diversity in the sector, summarise the main trends observed,

and oers perspectives to ensure that the industry not only operates in

asustainable manner, but that it is ultimately representative of all those

whodesire to participate in it.

65%

In 2021,

the global recorded

music market grew by 18.5%

of the total global recorded

music revenues

(16.9 billion USD)

with streaming

accounting for

Authors

Vialma is an international team of

passionate music lovers working together

to build the world’s rst streaming service

dedicated to classical and jazz. Established

in 2015, its mission is to bring culture

to lifeand to empower thousands of

subscribers through the wonders of art.

Vialma also partners with musicians

and ensembles, oering them visibility

and a digital platform through which

toencounter their audience.

The team who worked on this project

includes Guillaume Descottes, Eric Denut,

Cheryl Kwok, and Eva Klein.

PERSPECTIVES

Revenue distribution

and transformation

inthe music streaming

value chain

FOR THE DIVERSITY

OF CULTURAL

EXPRESSIONS

Key messages

Key messages 7

Introduction 8

SCOPE OF REFLECTION AND ACTION ..................................10

Types of stakeholders 10

Types of revenue generation and distribution models 14

Revenue generation 14

Revenue distributions 16

II.

OVERVIEW OF INITIATIVES, MEASURES, AND POLICIES ................... 18

Measures and initiatives to promote more equitable and transparent

revenuesdistribution 18

Measures and initiatives to promote diversity

in the music streaming ecosystem 20

Measures and initiatives to promote discoverability 22

Measures and initiatives to promote data generation, accessibility,

andtransparency 24

III.

OBSERVED TRENDS ...............................................26

IV.

PESPECTIVES FOR FUTURE ACTION ...................................28

TABLE OF CONTENTS

Key messages

\ The music streaming sector has experienced exponential growth since the

beginning of the 21st century, especially thanks to the development of large multinational

digital platforms with ever-expanding catalogues. The popularity of music streaming

rose even further with the onset of the COVID-19 pandemic in 2020, which curtailed live

performance opportunities and intensied the digital consumption of culture. In 2021,

streaming accounted for 65% of the total global recorded music revenues (16.9 billion

USD)

and 109.5 million new subscribers started to stream music, bringing the total to

523.9 million subscribers worldwide.

\ While the development status of the music streaming ecosystem varies greatly

between regions, the current music streaming landscape is dominated by large

multinational companies that are, with a few exceptions, based in Asia, Europe,

and North America, and a constellation of smaller specialized streaming services

that usually focus on a specic region or music genre. Factors such as the availability

and accessibility of technological and data infrastructures, and the development of

adapted regulatory frameworks play an important role on the development of the music

streaming sector, and there is a demonstrable need for regionally targeted initiatives

that are tailored to local contexts, especially in the Global South. The dominance of

multinational platforms raises important regulatory challenges at the national level, as

well as issues of diversity and discoverability of cultural content.

\ Current streaming remuneration models tend to favour artists who already

have access to robust nancial resources or who have large fan bases. At the core

of the discussion on streaming revenue redistribution is therefore the issue of

diversity – the diversity of creators who are able to participate in the streaming

environment, and the diversity of platforms and their ability to represent a wide

variety of cultural expressions. Despite abundant opportunities and growing revenue,

technological barriers to entry and inadequate remuneration models make nancial

sustainability a challenge for most stakeholders, especially creators – in comparison to

income generated from live music engagements, artists and songwriters earn three times

less on paid subscription services.

From the development of user-centric remuneration

models to public enquiries into the economics of streaming and civil society advocacy

movements, there are many opportunities to promote fairer revenue distribution in the

music streaming sector.

\ Fast-paced technological development and the complexity of the music

streaming industry requires a broad range of regulatory and policy tools that must

be consistently updated and adapted.

While regulation is a necessity and needs to be

implemented and tailored to this rapidly changing environment, additional tools, such

as education and funding, are also required to maximise the impact and scalability of

successful initiatives worldwide.

Introduction

Since the entry into force of the 2005 Convention on the Protection and Promotion of

the Diversity of Cultural Expressions, cultural and creative industries have undergone

signicant changes which have altered how value is distributed throughout the cultural

value chain. As underlined in UNESCO’s 2022 agship global report Re|Shaping Policies for

Creativity: Addressing culture as a global public good, although the majority of countries

have policies aimed at the digital transformation of cultural institutions and cultural and

creative industries, more action is needed to ensure that a diverse range of actors

(especially in terms of size, geographical location and gender) can participate in

the digital creative economy. In particular, as more and more consumers turn to digital

streaming methods to access cultural content, it is essential to develop and implement

tailored policies, measures and initiatives to ensure that artists are fairly remunerated

amidst the rapid emergence of new business and creator remuneration models.

Streaming – the process by which media content is distributed and consumed over the

internet in a continuous manner – has seen rapid growth since its inception in the early

2000s with the emergence of on-demand video-hosting platforms such as YouTube in

2005 and Netix in 2007. Seen as a way to distribute media more quickly and easily, video

streaming reached a global market size of USD376.06billion in 2020, and is projected to

reach USD932.29billion by 2028.

Similarly, music streaming has also seen rapid growth

and development, beginning with the emergence of platforms such as Spotify in 2006

and Amazon Music in 2007. In 2021, the total revenue of the global recorded music

industry was USD25.9billion, with streaming accounting for 65% of the total at

USD16.9billion.

This growth was only accelerated by the COVID-19 pandemic, which

led people to turn to at-home consumption of culture. The pandemic saw an 18% increase

in music streaming revenue against a 75% drop in live music revenue, and 109.5million

new subscribers started to stream music by mid-2021, bringing the total to 523.9million

subscribers worldwide.

6,7

It is evident that the music streaming industry is expanding – both

in terms of market size and revenue –at an expeditious rate, oering an unprecedented

variety of ever-evolving opportunities and business models for music sector.

Paradoxically, despite this promising outlook of abundant opportunity and growing

revenue, current remuneration models make financial sustainability a challenge for

most stakeholders. This is particularly the case for artists – in comparison to income

generated from live music engagements, artists and songwriters earn three times less

on paid subscription services.

Additionally, only a small proportion of artists are able to

rely on streaming as a signicant source of income; in Spotify’s case, for example, only

52,600 of the 11 million creators on its platform are reported to have generated more

than USD10,000 in royalties from its platform by the end of 2021.

Growing imbalance

between the substantial amount of remuneration received by streaming platforms,

major labels, and distributors, and the revenues distributed to independent

creators and labels has become increasingly apparent, exacerbating concerns from

artists and creators about the possibility of building a sustainable career based on

earnings from streaming. With creator royalties proposed by major platforms projected

to reach an all-time low for the 2023-2027 cycle, it is urgent to nd avenues that promote

a fairer and more sustainable working environment for artists.

Current streaming remuneration models tend to favour artists who already have access to robust

nancial resources or who have large fan bases. At the core of the discussion on streaming revenue

redistribution is therefore the issue of diversity –the diversity of creators who are able to participate in

the streaming environment, and the diversity of platforms and their ability to represent a wide variety

of cultural expressions. This Policy Brief provides an overview of the advantages and disadvantages of

the dierent remuneration models that currently exist and sheds light on initiatives currently in place to

promote fair remuneration and diversity in the music streaming sector. Drawing upon insights oered

by a variety of sources including secondary research reports and semi-structured interviews from both

prominent industry experts and emerging stakeholders, it also outlines strategic avenues to support

the just and transparent distribution of revenues in the music streaming industry for allstakeholders.

SCOPE OF REFLECTION AND ACTION

From lms and television series to music and books, streaming has transformed the ways in which

media is consumed. However, the streaming industry is structured dierently for each creative

sector and therefore presents unique challenges and opportunities that require tailored and

adapted responses.

The following section sheds light on the various types of stakeholders who are involved in the

music streaming sector as well as the various revenue distribution models that currently exist in

order to contextualize the types of initiatives that can be put in place to promote diversity and

fair remuneration.

Types of stakeholders

Creators

¢ Artists are named performers on a music track. In most cases, they receive their share of

revenue through the label companies they have signed to (subject to pre-existing agreements),

placing them at the very end of the remuneration chain.

¢ Composers and songwriters are known as authors of a music track. In most countries,

their remuneration is negotiated through representation by syndicates; around 10-15% of total

streaming revenue will go to composers, songwriters, and publishers.

¢ Non-featured artists and production sta are also involved in the creative process,

they are usually paid on a project basis and do not receive any additional remuneration from

streaming.

Labels (also known as record labels/record companies) andpublishers

¢ Labels are the entities responsible for marketing and promoting artists, coordinating

the production, recording, distribution of music, and managing copyrights for recordings. The

market is dominated by Major labels, while independent labels accounted for 33.9% of global

market share in 2020.

¢ Publishers manage rights for composers and songwriters. Their remit includes promoting

tracks to recording artists, licensing and monitoring use of tracks, and collecting and distributing

royalties to composers and songwriters. In general, revenue is paid to a rights collecting

organisation, where it is then redistributed to publishers and writers either evenly or according

to pre-established percentages. Publishing agreements in general are more generous for writers

as opposed to record agreements for artists.

Distributors

¢ Wholesale digital distributors obtain the right to sell a particular label’s recordings, then

take a proportion of the generated income from the recordings’ sales. The remaining proportion

is paid back to the label. The digitisation of distribution has eased the process for artists who are

now able to release their own music to any major streaming service. While this has increased

the amount of music made available to end-users, other related issues (such as increased

competition) have also led to signicant impacts on artists’ remuneration rates.

¢ End-user distributors

Download websites, such as iTunes (International), KuGou (China), Portaldisc (Chile), and Presto Music

(United Kingdom), allow users to pay a xed amount to acquire a copy of a track or album and access it locally

on their own devices. However, as audio les can easily be copied and redistributed, this form of distribution

saw a heightened amount of piracy that was detrimental to fair remuneration – streaming thus emerged as an

answer to this issue, and progressively replaced downloads worldwide.

Streaming services, such as Anghami (Arab States), Boomplay (Africa), Mdundo (Africa), QQ Music (China),

Spotify (International), Yandex Music (Russia), and YouTube (International), are digital platforms that host media

content. Users pay a fee, usually in the form of a subscription, to access a vast catalogue of music at a fraction

of the cost of the pre-streaming era. In most cases, streaming services pay labels to access and host music from

their catalogue. On-demand streaming services recommend tracks to users, usually through playlists made

by curators according to a certain theme, region, or genre of music; or through the use of recommendation

algorithms, which are based on factors pre-determined by a streaming service’s values and objectives as well

as users’ music tastes, listening preferences, and social habits. Though both methods can allow artists to gain

visibility, they have also been criticised for their inherent biases and putting users into “bubbles”, which inhibits

the diversication of consumption.

Social media platforms, such as TikTok (China) and Twitch (United States) have become increasingly

prominent tools for artists to share their music. Their emergence has further lowered the barrier to entry to the

music streaming market for artists and has facilitated access to a much wider audience base, including in the

Global South.

The development of the metaverse has also seen video game platforms such as Roblox and The

Sandbox become alternative venues for event hosting and, by extension, music streaming.

Rights organisations and syndicates

¢ Rights organisations and licensing companies allow rightsholders and creators to register their work.

These organisations licence the recorded music with users and when this music is played, royalties and fees

are collected then distributed to rightsholders. Criticised for their lack of transparency and their struggle to

audit distributors, they are nevertheless involved in negotiations with digital distributors to ensure the highest

collective remuneration possible.

¢ Syndicates and industry-based associations monitor and regulate the industry, sometimes alongside

government bodies. In Brazil, the International Federation of the Phonographic Industry and Pró-Música Brasil

formed an alliance to combat streaming manipulation services. In Cambodia, the government partnered

with The Sound Initiative to provide a public platform for dialogue through the .WAV [Women’s Amplied

Voices] Status of the Artist forum. The initiative is supported by the United States Agency for International

Development. Regulatory partnerships also take place through voluntary commitments such as the Worldwide

Independent Network’s Fair Digital Deals Declaration, which commits voluntary signatories to treat artists fairly.

In Chile, IMICHILE, a guild of labels, distributors, promoters, online stores, communications agencies, and more,

seeks to promote and develop the Chilean independent music industry.

Public sector

¢ Intellectual property regulatory bodies usually operate at the government level. Their role is to monitor

and protect the welfare of intellectual property, such as through copyright and patents, and will also campaign

for the development of intellectual property laws and policies in some instances.

¢ Policymakers are responsible for law-making and regulation of the music streaming industry, including

through the development of regulatory frameworks and policies. In Germany, a judicial injunction prevented

the operations of a streaming manipulation service (known as streaming or click farms, streaming manipulation

services fraudulently generate streams, manipulating streaming data to favour targeted songs or content, thus

increasing their share in the market-centric revenue model). The Indonesian government has also developed

Regulation Number 56 of 2021 Concerning the Management of Copyright Royalties for Songs and Music, which

asserts the need for all commercial venues which play or stream music to obtain the appropriate copyright

licence, as well as facilitating the creation of a centralised data centre to ensure that all copyright details

regarding Indonesian songs are accurately catalogued.

$ $

Intergovernmental bodies

¢ Intergovernmental bodies such as the World Intellectual Property Organisation (WIPO) and the United

Nations Educational, Scientic, and Cultural Organisation (UNESCO) play a role in the music streaming industry

through their normative instruments (Conventions, Recommendations, and other normative frameworks).

They also support evidence-based decision-making, notably through research and knowledge-sharing, and

strengthen the capacities of stakeholders through international cooperation programmes. The ARIPO-CISAC

Africa Strategic Plan developed by ARIPO (the African Regional Intellectual Property Organisation), for instance,

aims to ensure that all rightsholders receive fair remuneration based on their work.

Users/consumers

¢ Users and consumers generate the primary source of revenue which fuels the music streaming value

chain. In the rst quarter of 2021, the number of subscribers to music streaming services worldwide was

487 million.

In 2020, paid subscription streaming revenues increased by 18.5%.

As such, they exert key

inuence over the types of content streaming platforms host and recommend, as well as shaping artists’

creative outputs by extension.

Figure

Flow of revenues in the music streaming value chain

End-user distributor

(e.g. streaming platform)

Composers/

Songwriters

Artists

Consumers

Publishers Labels

Wholesale digital

distributor

Figure

Top 20 global digital distributors in music in 2020

No. Service Country

Monthly users

Year Type

1 YouTube USA 2,000,000,000 2020 Audio-visual

2 Musical.ly China 689,200,000 2020 Audio-visual

3 iQiyi China 570,000,000 2020 Audio-visual

4 Tencent Video China 482,960,000 2020 Audio-visual

5 Vevo USA 400,000,000 2016 Audio-visual

6 Spotify Sweden 320,000,000 2020 Audio

7 KuGou China 296,510,000 2020 Audio

8 iHeartRadio USA 275,000,000 2019 Audio

9 QQ Music China 238,780,000 2020 Audio

10 Gaana India 185,000,000 2020 Audio

11 SoundCloud Germany 175,000,000 2019 Audio

12 bilibili China 172,000,000 2020 Audio-visual

13 Kuwo China 125,000,000 2020 Audio

14 JioSaavn India 104,000,000 2019 Audio

15 NetEase Cloud Music(163 Music) China 82,440,000 2020 Audio

16 TuneIn USA 75,000,000 2019 Audio

17 Pandora USA 63,500,000 2019 Audio

18 Apple Music USA 60,000,000 2019 Audio

19 Amazon Music USA 55,000,000 2020 Audio

20 Anghami Lebanon 21,000,000 2019 Audio

Source: BOP Consulting (2021).

Types of revenue generation and distribution models

There are models for revenue generation and distribution in music streaming. While the subscription model

is the most common globally, signicant dierences can be observed at the sub-regional level. Within Asia,

for example, subscription-based streaming far exceeds the usage of ad-supported streaming in Japan and

the Republic of Korea; whereas the opposite is observed in countries such as the Philippines, Cambodia, and

Bangladesh.

Some streaming platforms use a combination of models to maximise their revenue streams and

to optimise revenue generation.

Revenue generation

¢ Subscriptions

Description Users pay streaming platforms a recurring subscription fee to gain access to the platform’s

content and features such as music tracks, playlists, and podcasts. The platform will keep a

portion of the revenue generated and will distribute around 55% of the gross revenue pot to

labels and distributors, usually according to the market centric payment system (see below).

The portion which is distributed to artists will depend on agreements that they have with their

labels.

Examples Anghami (Middle East), Gaana (India), Portaldisc (Chile), Spinlet (Africa), Spotify Premium

(International), QQ Music (China)

Evaluation Users demonstrate a form of loyalty and commitment to the streaming platform by agreeing

to pay a recurring subscription fee, resulting in a consistent and regular source of income for

streaming services. A dedicated user base also suggests/guarantees a certain amount of user

interaction with the platform, which is particularly desirable for rightsholders whose channels

for revenue generation are usually based on royalty payouts as a result of user interaction with

their music. In general, this user base can be easily accessed by artists (regardless of whether

they are represented by a label), provided that they have the logistical means to do so (i.e.

access to a label-based/DIY distributor). However, ease of access to these platforms leads to an

increasingly vast amount and variety of content available for user consumption. For creators,

achieving visibility in a catalogue can therefore be a challenge; artists who have promotional

support from major labels both in and outside the platform have a much higher chance of

getting streams and therefore revenues. This disparity between well versus lesser-known artists

is thus particularly exacerbated by the use of the market-centric payment system, as it does not

provide any incentive for labels and marketing teams to invest in artists who do not already

have a following, or are not already being streamed.

¢ Free/ad-supported

Description Users pay a discounted fee/do not pay any fee to access a streaming platform’s content and

features. The majority of revenue is instead generated by the placement of advertisements,

which the user encounters while accessing the platform. This model has been chosen by many

subscription services as an alternative revenue stream, where the primary purpose of using the

ad-supported model is to encourage users to trial the platform before converting to becoming

paying subscribers.

Examples Free tiers of Anghami (Middle East), KuGou (China), Mdundo (Africa), Mkito (East Africa), Spotify

(International), TrackDrip (Latin American and the Caribbean), YouTube (International)

Evaluation Without nancial commitment, there is no barrier to entry for users to access content on ad-

supported platforms. However, the lack of subscription-based revenue reduces the overall

amount of revenue per user. As such, it is a more accessible but less lucrative model for revenue

generation. It is expected that by 2022 YouTube will generate more revenues for rights holders

than Spotify, which would signicantly change the dynamics of this business model. It is

noteworthy that the ad-supported model for streaming platforms is growing in popularity, but

that it remains dwarfed by the radio advertising market, despite radio consumption declining

in recent years. In 2019, for instance, the US radio advertising market was worth 16.6 billion USD

compared to 1.2 billion USD for ad-supported streaming.

¢ Non-fungible tokens (NFTs) and cryptocurrency-based

Description Decentralised remuneration models empowered by blockchain technology, such as non-

fungible tokens (NFTs), have seen a meteoric rise. To put it simply, digital art NFTs consist of

a digital work (audio, video, multimedia) which can be permanently and uniquely identied

and traced. The owner of the digital asset stores it in a digital ledger, called blockchain. On top

of granting an ownership, NFTs have another core benet: the owner can sell, or licence for

instance its digital art to third parties.

Examples Audius (United States), OPUS Audio (United Kingdom), Roblox (United States)

Evaluation These models pose great benets to artists both in terms of remuneration and creative freedom.

By hosting and sharing content on a decentralised platform, traditional remuneration-based

barriers are bypassed; artists are allowed to retain full ownership of their creative work and have

control over how they are monetised. The use of NFTs has also promoted closer engagement

between artists and fans. In the case of DJ Diplo, for example, fans are able to buy a token for

a particular song in exchange for benets such as receiving a set share of streaming royalties,

additional content, or access to behind-the-scenes events.

By allowing fans to own a fraction

of their favourite artists’ music, artists are able to more easily build their audience following

and consolidate their revenue streams. Countries with rapidly-growing art markets (such as

those in Africa) have seen a sharp increase in demand – and subsequent adaptation – towards

NFTs.

However, these models are also implicated by issues relating to the digital divide. With

the majority of NFTs being cryptocurrency-based, artists who wish to utilise this remuneration

model are required to possess particular access and skills, presenting an additional barrier which

could be inhibitory to their participation.

Revenue distributions

¢ Market-centric payment system (MCPS)

Description MCPS is a remuneration model most commonly used by ad-supported or subscription-based

platforms. In essence, revenue generated from users or subscribers is pooled by the platform;

it is then redistributed and paid out to rightsholders (usually labels) based on the market share

they claim of the total number of streams on a platform. Depending on the agreement that

the artist has with the label, an average of 20% of this revenue will go to the artist, though this

percentage can be as low as 2% for artists with agreements from the pre-streaming era.

Examples Anghami (Middle East), Apple Music (International), Claro Música (Latin America and the

Caribbean), Ragya (India), Spinlet (Africa), Spotify (International)

Evaluation MCPS is a model that works heavily in favour of artists and rightsholders who already have a

prominent presence on streaming platforms as they account for a greater percentage of the

total number of streams. In 2020, Spotify conrmed that 57,000 artists in its catalogue account

for 90% of streams on their platform –the remaining lesser-known artists, who represent the

majority of the total number of artists on Spotify, are left to share the revenue generated by the

remaining 10% of streams.

The highest-earning 800 artists on Spotify receive 20% of the total

revenue.

This means that in 2020, roughly 20.7 billion USD was paid to 57,000 artists, and the

remaining 2.3 billion USD was distributed among the platform’s remaining 7.94 million artists.

The biases with MCPS against artists’ fair remuneration are evident: while it favours artists who

are more heavily streamed per user, this model is also more susceptible to fraud through use of

click farms, where one fraudulent account (e.g. an automated bot) can be used to stream one

particular artist’s tracks and falsify engagement for increased royalties, therefore aecting the

market share of other artists.

¢ User-centric payment system (UCPS)

Description Unlike the market-centric payment system where revenue paid to rightsholders is dependent

upon their market share of total streams, the user-centric payment system, otherwise referred

to as the fan-centred or fan-powered royalties mode, ensures that the revenue generated by

users goes only to the rightsholders of the tracks they have streamed.

Examples SoundCloud (International), Tidal (Norway/United States), Deezer (International)

Evaluation This system is particularly benecial for artists who have less market share due to their size,

experience, or if they work in less mainstream genres of music. Deezer CEO Hans-Holger

Albrecht noted of the model in 2017 that it is ‘better for mid-sized artists, smaller artists and

upcoming artists as it gives them a good chance’.

For users, the transparency oered by

this system can be an incentive to sign up to paid streaming subscription services. Research

conducted by the Centre national de la musique in France has also shown that this system

can minimise the impact of fraudulent behaviour, such as click-farming (where bots are used

to articially inate the number of streams for individual tracks). While research continues to

be conducted into the benets of this model, it remains unclear what the nancial burden

for stakeholders such as streaming services would be to move towards and sustain the user-

centric payment system.

The top 10 most-paid artists are predicted to lose 17.2% of earnings;

convincing major stakeholders of the benets of such a change will prove challenging. Concern

has also been expressed by stakeholders at the impact of recommendation tools and how value

will be distributed between autonomous streams and recommended streams.

¢ Fee for service

Description Users pay platforms a one-o charge each time they access or purchase a digital le or service

(e.g. pay-per-view, pay-per-listen, le downloads).

Examples Amazon (International), Bandcamp (United States), Claro Música (Latin America and the

Caribbean), iTunes (International), Mkito (East Africa), Spinlet (Africa)

Evaluation Consumers typically buy a digital le (a song or an album) which they then own, as with an

ordinary physical transaction. Artists get paid a set fee for each download depending on

prior agreements with labels, rather than receiving remuneration from a share of a larger

pool of revenue. Unlike digital streaming, consumption thereafter is irrelevant in determining

remuneration. As such, this more traditional means of payment is fairer (artists are paid for what

they make) and oers artists greater transparency on the way that they receive payment; there

is a clear split that is most often predetermined in contractual terms. Losers of this system are

those who make music with which consumers interact more and for longer periods, as this

continued interaction will not be reected directly in the artist’s revenue. Fee-for-service or pay-

per-product services are a more unsteady source of income for artists as these oer only one-o

payments. In the absence of curated playlists, artists have more control over the way their works

are advertised on these platforms.

¢ Donations/patron-based

Description On some platforms, users are able to give (or pledge) as much as they believe a creator’s content

is worth directly to them – these payments will sometimes be one-o for a product (e.g. a

music track or a piece of merchandise), or termly on a subscription-like basis. Creators pay the

platform a set fee and other administrative costs on a termly basis to host their content. Built-

in community features, such as forums and chat boxes, are also common to promote a closer

relationship between creator and fan.

Examples Bandcamp (United States), Mixcloud Select (United Kingdom), Patreon (United States)

Evaluation A signicant benet of this model is the direct access between creators and users. On the one

hand, it enables creators to receive a higher percentage of royalties – Bandcamp, for example,

pays out an average of 82% of revenue gained to artists.

On the other, its community-based

focus also allows for closer fan interaction, which is particularly benecial in the long term for

securing revenue gain by building loyal fanbases. For users, knowing that they are directly

impacting the livelihood of their favourite creators is also an incentive to make regular

contributions. For creators, as their market share/popularity relative to other artists is not a

factor (as is the case with MCPS), this model is especially benecial for independent artists with

fewer nancial and promotional resources. It is important to note as well that these models

oer a quicker payout time (Bandcamp aims to pay artists 24-48 hours after receiving payment

from the user) as opposed to digital distributors, who usually pay out quarterly. While extremely

favourable to artists, this model still has a disadvantage: it relies mainly on a community of

engaged fans which accept to be monetised. Many musicians do not have either the skills or

narrative needed to build such a community.

OVERVIEW OF INITIATIVES, MEASURES, AND POLICIES

The following section provides an overview of the main initiatives, measures, and policies around

the world that seek to ensure fair revenue distribution in the music streaming value chain.

They are articulated around four broad categories of intervention: remuneration,accessibility,

discoverability, and data generation.

Measures and initiatives to promote more

equitable and transparent revenues distribution

The main factor in promoting the nancial sustainability of all stakeholders in the music streaming

value chain, particularly artists, is the development of methods, models, and measures which aim

to distribute revenues in a more equitable and transparent way across the value chain.

Objectives \ To build upon pre-existing remuneration models in the multimedia sector to

inspire new or improved revenue distribution models in music streaming

\ To implement policies, measures and initiatives that promote diversity

throughout the music streaming value chain (particularly for creators) by

ensuring fair and equitable remuneration opportunities

Formats Development of new or improved remuneration models; developing or

updating copyright legislation for the digital environment; leading advocacy and

awareness-raising campaigns for fair remuneration; undertaking fraud protection

initiatives; formation of alliances within the sector

Examples \ Facilitate and support the implementation of fairer remuneration

models, such as the equitable remuneration model. Emerging as a top

recommendation of the parliamentary inquiry into the economics of music

streaming held in the United Kingdom in 2021, the equitable remuneration

model draws upon pre-existing remuneration models used in the broadcasting

sector (e.g. radio). Instead of relying on labels to distribute their share of

royalties to them (20% on average), in this model, artists would receive 50%

directly from a rights collection society (such as Phonographic Performance

Limited (PPL) in the UK), while the label company would receive the other

50%. This model therefore ensures that artists are able to maintain a stream of

income which is independent from pre-existing agreements with labels, while

also particularly beneting legacy artists whose agreements, signed in the pre-

streaming era, have resulted in signicantly lower royalty rates than those of

modern artists. Article 108 of the Spanish copyright law, which implemented

the European Union Information Society Directive 2001, came into force in 2006

and extended equitable remuneration from broadcasting and performances to

digital music streaming.

II.

Examples

(Continued)

\ The development or revision of copyright legislation to ensure that artists are fairly

paid in the digital environment. Pre-existing copyright laws such as the Digital Millennium

extent, user-generated sites from being liable for content that infringes copyright. While its

initial purpose was to protect small, start-up-like businesses from severe copyright liabilities,

in the age of music streaming, this has in turn led to a disparity between royalties paid by user-

generated, ad-funded sites and those paid by paid-for streaming services for the same content.

In recognition of these new developments, Article 17 of EU Directive 2019/790 increases the

responsibility of user-generated sites to obtain authorisation for the content or remove it if

authorisation is withheld, ensuring that rightsholders are fairly remunerated regardless of the

platform they choose to share their content.

Another avenue for addressing these concerns

is through the revision of existing international treaties and normative instruments, such as

Article 8 of the World Intellectual Property Organisation Copyright Treaty, which will encourage

a revision of domestic laws.

\ Advocacy by industry stakeholders can also bring awareness to injustices of fair

remuneration in the industry and lead to change. Recent advocacy and awareness-raising

campaigns include #BrokenRecord, a social media movement against the current distribution

of wealth in the cultural value chain.

Founded by Tom Gray, a musician and composer, the

movement arose to highlight the problem that, exacerbated by the cancellation of live events

during the pandemic, music streaming revenues are insucient to sustain a career in music,

despite streaming being the leading way that music is consumed. The movement, supported by

the Musicians’ Union and Ivors Academy, has been credited with catalysing the aforementioned

parliamentary inquiry into the economics of streaming in the United Kingdom.

\ Fraud protection also plays a crucial role in ensuring that standards of fair remuneration

in the industry are maintained. The International Federation of the Phonographic Industry

and Pró-Música Brasil, an ocial representative body of the record labels in the Brazilian

phonographic market, formed a partnership to protect the interests of artists and record labels

by shutting down streaming manipulation services. Under the market-centric payment model,

streaming manipulation services allow stakeholders to fraudulently inate their number of

streams, therefore increasing their share of the market and leading to added revenue gain. As a

result, in 2019, IFPI formed a broad coalition of major and independent labels, publishers, digital

streaming platforms, and artist organisations to commit to a code of best practice in tackling

the fraudulent activity of streaming manipulation.

According to the IFPI website, by July 2021,

the alliance had been responsible for impacting the operations of 65 streaming manipulation

services, with 10 sites shutting down and 20 no longer oering the service.

Measures and initiatives to promote diversity

inthemusic streaming ecosystem

Accessibility accounts for the ability of stakeholders to get access to, participate in, and benet from the music

streaming market. To promote diversity in the music streaming ecosystem, it is essential that the industry be

accessible to all, including those who are already part of it.

Objectives \ To create spaces that allow audiences to interact with artists directly

\ To establish strong professional networks and mentoring opportunities

\ To ensure that all stakeholders, and especially creators, know how to best utilize the

opportunities oered by streaming platforms

Formats Skills-based workshops; artist incubator programmes; networking opportunities; feedback

forums and open dialogue with policymakers

Examples \ Training/incubator programmes for artists improve accessibility and entry to the

music streaming industry by helping creators to access resources and gain technological skills

that are not commonly available or taught. Music creation in the digital landscape, for example,

requires a dierent skill set than performing live.

\ Technical and vocational education and training (TVET) can signicantly reduce

barriers to entry in the music streaming industry. Gender@Work, a three-year training

programme in Ghana and South Africa, teaches women fundamental and technical skills for

participating in the industry.

While this course focuses on providing an all-encompassing

package of skills, The Sound Initiative (TSI) aims to equip its trainees with specically digital

know-how. TSI is a charity and academy based in Cambodia that oers a specic training

programme entitled ‘Digital Education for Artists and Producers’ that teaches musicians digital

skills such as distribution, branding, marketing, business, and communication.

Instead of

working with a particular demographic, the course (which is online and in-person) is open

to musicians of all skill levels, ensuring that both emerging, as well as experienced musicians

who feel the need to retrain for music streaming, are able to acquire specic skills for digital

streaming. With 45 people trained by TSI across all programmes since its inception in 2018, a lack

of resources and capacity may have limited the impact and reach of these training programmes.

\ Establishment of inter-sector communication and collaboration platforms can improve

inclusion and encourage peer-learning within the music streaming sector. Inspired by

UNESCO’s 1980 Recommendation concerning the Status of the Artist, the .WAV [Women’s

Amplied Voices] Status of the Artist forum is a platform of collaborative communication and

discussion between Cambodian government representatives and members of the Cambodian

creative industries.

The purpose of this forum is to encourage dialogue to assess ways in which

to improve the working conditions of artists, particularly female artists, thereby creating a more

accessible working environment for female artists. This type of open-forum advocacy in an

ongoing dialogue establishes a monitoring system that allows for change in the industry and in

the interests of stakeholders.

Examples

(Continued)

\ The development of independent music distributors can simplify the music streaming

value chain and help artists distribute their music on their own terms. The development

of independent, do-it-yourself style distributors such as DistroKid, TuneCore, and CD Baby also

allow artists to upload their music to streaming platforms independently without needing to go

through a label. While these self-releasing artists do not benet from promotional, logistical, or

nancial resources that labels provide, for less-experienced artists who do not wish/are unable

to receive label representation, this process is more straightforward, less costly, and allows

them to retain all the rights to their music. Independent music distributors are also useful tools

for smaller streaming services, particularly those specialising in more niche regions/genres of

music, which have found diculty in accessing and hosting music catalogues from major labels

and distributors. Deedo, a streaming service oering a catalogue of Pan-African music, has

created its own distribution service where artists can directly upload their music onto Deedo’s

platform.

By acting as both streaming platform and distributor, they not only have undisrupted

access to their own independent catalogue, but also play a role in providing opportunities for

lesser-known artists to have their music on a streaming platform.

\ Improving accessibility in the music streaming market also requires measures to close

the digital skills and access gap. With 96% of the 2.9 billion people still living oine coming

from the developing world, initiatives in developed countries benet from greater access to

resources, technology and data, and are thus typically more established and well-promoted

than those in developing countries.

However, within that divide, there is a further rift between

urban areas, where 77% of the population has access to 4G, and rural areas, where only 22% of

the population has access to 4G.

Thus, the digital skills gap means that the eects of these new

tools are felt unequally across the globe.

\ Funding opportunities for creative investment, especially seed-funding for emerging

projects, is essential to enable a wider diversity of stakeholders to participate in the music

streaming value chain. The music industry is seen as a high-risk sector by many banks, thus

making it dicult to obtain loans. Afreximbank, a pan-African nancial services institution,

launched its USD500M Creative Industry Support Fund to provide much-needed infrastructure

and facilitate the monetisation and commercialisation of creative activity, including the

production and trade of creative goods.

\ International frameworks can improve diversity in the music streaming ecosystem

by setting norms and standards to guide governments in the development or revision

of inclusive, fair, and transparent legislation. Relevant international frameworks include,

amongst others, the UNESCO’s 2017 Operational Guidelines on the implementation of the

2005 Convention on the Protection and Promotion of the Diversity of Cultural Expressions in

the Digital Environment and the UNESCO 2021 Recommendation on the Ethics of Articial

Intelligence.

Measures and initiatives to promote discoverability

Access to the music streaming market alone is insucient to generate sustainable and signicant revenue

generation for creators. Indeed, musicians must be able to make themselves known and let their music be

heard by users in a crowded and highly competitive market. Initiatives to promote discoverability are therefore

crucial to ensure that a diverse range of stakeholders is not only able to participate in, but also benet from this

ecosystem.

Objectives \ Put in place measures to promote diversity and discoverability, and to reduce bias, notably

in algorithmic recommendations

\ Introduce listeners to a diversity of music and break siloes

Formats Diversity-driven algorithms; supporting the emergence of specialized streaming platforms for

particular niches; playlist curation according to specic characteristics (e.g. gender/genre etc.);

initiatives to promote data-gathering and transparency

Examples \ Playlisting initiatives implemented on a local/regional scale can have a signicant

impact on the discoverability of artists. The signicance of playlisting was particularly

highlighted by initiatives which took place during the COVID-19 pandemic, such as Apple

Music’s ‘Stream Local’ initiative in South Africa and India.

Introduced in April 2020, the platform

curated region-specic playlists featuring music by local artists. By promoting artists within their

local communities, this initiative helped to increase the market share of local musicians and

create proximate, geolocalised fanbases which have the potential to bring longer-term benets,

such as continued streams or attendance at live shows.

\ Transparent diversity-driven algorithms for music recommendations should be

designed and implemented, and their impact should be monitored over time to inform

future action. Algorithms, or recommender systems, are designed to help users navigate a

streaming service’s catalogue by automatically creating playlists and providing personalised

recommendations with a specic objective, for example to promote new releases. Algorithms

have been criticized for their lack of transparency and their inherent biases. The implementation

of diversity metrics in recommendation algorithms, for instance, the popularity or ‘nicheness’ of

a track or artist, as a way to enhance discoverability is a path that is being explored by streaming

platforms such as Deezer. However, diversity metrics are complex and likely to change rapidly

over time, and the success of algorithms also depends on users’ willingness to interact with

algorithmic recommendations. As a result, the use transparent and diversity-driven algorithms

to improve discoverability is a powerful but contextual tool that is currently left at the hands of

the streaming platforms themselves, and further research into its impact, as well as the metrics

that should be used to quantify it, is therefore needed. The possibility to develop a regulatory

framework for algorithms at the policy level, including guidelines for quotas (gender, language,

origin) and other measures inspired from public broadcasting services, can also be explored.

\ The implementation of legislation can signicantly increase the visibility of local and

regional content on streaming platforms. National legislative instruments can be enacted to

ensure that a certain amount of local content is made available by and discoverable on streaming

services. An example of this is the Canadian Government’s introduction of Bill C-11, referred to

as the Online Streaming Act, which is a bill introduced by the Minister of Canadian Heritage that

seeks to amend the Broadcasting Act (S.C. 1991, c.11) to incorporate online undertakings.

The

Bill would subject streaming services to the same standards as traditional broadcasters, that is,

to “contribute to the creation and availability of Canadian stories and music”.

The Bill, which

seeks to promote, and increase its visibility of, Canadian content, will empower the Canadian

Radio-television and Telecommunications Commission to establish a regulatory framework on

the types of content promoted by streaming services. The Bill aims to create more opportunities

for Canadian artists and foster greater diversity and inclusivity in the online streaming sector.

Examples

(Continued)

\ While the development of specialised streaming platforms is a powerful tool to

promote lesser-known musicians working in more niche genres/regions, audience

fragmentation is a signicant risk. In India, with the majority of music consumption

being popular music such as Bollywood, it is more dicult to make alternative genres more

‘discoverable’, rendering them less attractive for major streaming platforms and record labels

to onboard and promote. In establishing a separate platform dedicated specically to hosting

Indian classical music, Ragya creates an environment which allows for new and existing Indian

classical musicians to be discovered in a less competitive environment, while also cultivating

a tailored and dedicated fanbase for a less mainstream genre.

In theory, this provides artists

with accessibility, discoverability and the potential to generate revenue, however, in practice,

users are unlikely to be willing to pay subscriptions for multiple niche streaming services to

satisfy their consumption. While this may lead to a fragmentation of audiences in some cases,

alliances between smaller platforms can help cross-pollination and relying on ad-based revenue

generation models and public or private subsidies rather than paid subscriptions can reduce the

barrier to access specialized platforms.

\ The diversication of digital channels beyond the streaming platforms themselves is

key for the discoverability of diverse content. While curation through algorithms can aect

discoverability, in reality, around 68% of total streams on major services are user-driven.

Increasing discoverability on other platforms (social media platforms and video streaming

platforms, among others) can also be highly eective for increasing discoverability on music

streaming services. Midem Africa runs a number of workshops, seminars, and courses teaching

musicians how to market their music successfully using social media.

Similarly, Station Beirut (a

Lebanese cultural space and exchange platform for artists) is working with Music Ally (a London-

based music skills and knowledge company) to oer a selection of independent Lebanese

musicians training in digital music marketing to increase their discoverability in the digital

landscape and build a fanbase.

Measures and initiatives to promote data generation,

accessibility, and transparency

The purpose of data generation is to encourage evidence-based decision-making at the local, national, and

international level. Data can help to shed light on the current state of the industry, to monitor the impact of

policies, initiatives and measures through time, and to inform future projects and regulatory frameworks to

ensure the sustainable and inclusive growth of the music streaming sector.

Objectives \ To encourage evidence-based decision- and policy-making

\ To monitor the impact of initiatives and policies through time, notably on the diversity of

the sector

\ To maximise eciency and boost the transparency and sustainability across the music

streaming value chain

Formats National reports and monitoring exercises; data tools for artists to track their earnings in real time;

third-party data aggregators; remuneration-driven data platforms; segmented data reports to

assess diversity

Examples \ Monitoring exercises at the national level should enable global monitoring of the music

streaming industry. IFPI’s Global Music Reports provide a brief overview on the state of the global

recorded music market and highlight the industry’s value.

Economic measures allow stakeholders

to identify key markets and regions and allow policymakers to monitor the performance of the

industry. Broader reports focused on the cultural and creative industries, such as UNESCO’ agship

global report series Re|Shaping Policies for Creativity, enable stakeholders to get an overview of the

main trends shaping the sector, and the resulting opportunities and challenges.

Examples

(Continued)

\ The generation and sharing of data are at the core of transparency and infrastructure-

building: The generation and availability of transparent and digestible data is an essential tool

to inform policymaking on the one hand, and help artists identify and exploit the best revenue

streams for them on the other hand. RSFAM (Revenue Streams for African Musicians), a project

run by the Music in Africa Foundation, is conducting data-led research into reliable revenue

streams for South African musicians. RSFAM will “collect and analyse data on the earning trends

of music creators to identify and optimise the practises that generate income across South

Africa’s nine provinces”.

The project is in its pilot phase in South Africa, however, if successful, it

will be extended to other African countries. The music sector in Africa continues to suer from a

lack of reliable statistics and data. As a result, many music practitioners are unable to monetise

their work with maximum eciency. The project has two phases. Firstly, research and data

gathering will be conducted. Secondly, the data will be made available to music practitioners

and inform the nature and direction of workshops, training, and advocacy carried out by RSFAM.

\ Data-led reports can drive advocacy and awareness-raising campaigns. A UK

Parliamentary inquiry, conducted by Members of Parliament on the House of Commons Digital,

Culture, Media and Sport Committee, into the economics of music streaming examined the

impact that music streaming is having on musicians.

The inquiry heard from creators, industry

experts, streaming services, and major UK record labels and tech companies. The research has

allowed the committee to make informed policy recommendations, particularly regarding fair

remuneration, resulting in an investigation of the industry by the Competition and Markets

Authority.

\ Third-party aggregators can bridge the gap between data and artists, empowering the

latter to make informed choices about their career. Data gathered by private entities (such as

Chartmetric and UnitedMasters) can help music practitioners to better market themselves on

digital streaming platforms and social media. By showing how fans are interacting with their

music, data providers give artists a clearer picture of consumer preferences and the performance

of their work, allowing them to monetise their work more eciently.

\ Remuneration-driven data platforms, often led by rights collection societies, oer

an important tool to improve the transparency of how remuneration data is collected,

analysed, and displayed. The Republic of Korea’s Music Copyright Association (KOMCA), for

example, has developed an application which acts as “a transparent copyright royalty distribution

system”.

Rightsholders are able to access a payment statement which includes data that has

traditionally been inaccessible and dicult to comprehend, such as the total amount of royalties

paid out per month, the frequency in which tracks are licensed, and the royalties generated per

licence directly on their phone, allowing rightsholders to better understand and optimise their

income streams.

\ Gathering disaggregated data is essential to monitor diversity in the music streaming

sector. Isolating data groups allows stakeholders and policymakers to assess the diversity of the

industry in ner detail and make informed decisions. For instance, research conducted by Spotify

shows that female and mixed-group artists are streamed less than their male counterparts.

Female representation is slightly higher in algorithm-generated listening than it is in organic

listening, but the study also showed that algorithm trends generally predict and consolidate

consumer habits. While this data sheds light on the disparity of female representation, most

existing data only comes from large European or North American streaming services where

consumer habits dier greatly from the rest of the world. There is also the challenge of assessing

gender representation, as in the absence of self-identication (which itself is unreliable, as band

members, gender identities, and other complexities are changing regularly and artists might

not comply with self-identication protocols) there are few ways to identify gender, sexual

orientation, ethnicity, and other measures of diversity.

OBSERVED TRENDS

¢ There are signicant asymmetries in the remuneration of artists in the music

streaming industry. Major labels, such as Universal Music Group, Sony Music Entertainment,

and Warner Music Group, which hold 66.1% of global market share collectively,

are able to

devote more nancial and logistical resources to support artists and are more likely to invest

in artists who have demonstrable potential for return on investment. Artists signed to a major

label thus become more visible on major streaming platforms, leading to increased exposure

and revenue gain. The most common revenue sharing model used in the streaming industry,

the Market-centric payment system (MCPS), favours a small number of artists who have strong

pre-existing fan-bases. This is illustrated by the fact that in 2020, Spotify distributed roughly

20.7billion USD amongst its top 57,000 artists, while the platform’s remaining 7.94 million artists

received 2.3 billion USD amongst them.

¢ The majority of initiatives promoting fair revenue distribution in the music streaming

industry are based in, or have substantial connections to, developed countries. Initiatives

currently in place in the developing world tend to rely more heavily on assistance and funding

from developed countries (e.g. The Sound Initiative; Station Beirut). The digital access and

skills gap has resulted in a dierent emphasis for initiatives in the Global South, which tend to

promote accessibility to the wider music industry and skills development, whereas the Global

North world sees more initiatives around the music streaming industry itself, such as syndication,

data generation, and regulation.

¢ While the pandemic has laid bare the challenges the music industry is facing,

consequently leading to a surge of new initiatives (e.g. #BrokenRecord; Stream Local),

the trajectories and results of these initiatives will undoubtedly take time to appear. The

streaming industry rose to new heights during the pandemic as an alternative source of income

for many artists, but not all were able to benet from it equally. As a result of the acceleration

of the digital shift caused by the pandemic and the growing recognition of the disadvantages

of traditional revenue distribution models such as the market-centric payment system (MCPS),

increased emphasis has been placed on business models which favour direct monetisation and

empower creators;such as the patronage remuneration model, which improved remuneration

rates, and encouraged closer artist-fan relationships. As the search for more equitable and fair

remuneration models continues, it is expected that this phenomenon will continue to develop

as the world moves into a post-COVID era.

¢ The maturity of regulatory and monitoring frameworks diers greatly between

regions. Some countries, especially (but not exclusively) in the Global North, have established

authorities which are dedicated to monitoring every step of the value chain, nurturing the

development of processes such as data reporting and publication which have in turn helped

to foster a more robust and transparent ecosystem. Others, however, lack infrastructure such

as enforcement of legislations against copyright infringement, syndication, and intellectual

property rights protection which are adapted for the digital ecosystem. The discrepancy has

particularly aected the extent of which fair remuneration and diversity has been accounted for

throughout the value chain of the music streaming industry.

¢ While there is an increasing amount and variety of revenue streams and payment

methods available online for musicians, regulation and policy regarding these models

have lagged behind. New technologies such as non-fungible tokens and blockchain have

presented themselves as alternative streams of revenue for artists. These new methods of revenue

distribution are often decentralised, meaning artists receive remuneration faster and with fewer

middlemen. However, the rate in which these new technologies have emerged and evolved has

exacerbated the gap between what has been put into practice and corresponding regulation. As

challenges to regulate the streaming industries persist, these developments continue to highlight

the need for regulatory bodies to liaise with and develop regulatory frameworks alongside

industry professionals and other stakeholders within the technology industries.

III.

¢ Data transparency and availability is an ongoing challenge with implications for every link of the

music streaming value chain. The emergence of streaming platforms and data-gathering services such as

Chartmetric has led to greater quantiability and availability of data. However, data – particularly regarding

remuneration and diversity – is often dicult for all stakeholders to gain access to and might not always be

passed onto artists at the end of the cultural value chain in a clear and comprehensible manner. While vast

amounts of streaming data exist through publications such as Spotify’s annual Loud&Clear reports, ensuring

that this data is comprehensive, accurate, consistent and presented in a digestible and actionable way for

policymakers is another important step in the formalisation of regulation and monitoring. There is also a

general shortage of reliable data for assessing diversity and gender representation

PERSPECTIVES FOR FUTURE ACTION

¢ Access to robust data must be democratised for all stakeholders in the music

streaming value chain. For some markets, the continued lack of data generation, accessibility,

and transparency has prohibited clear understanding of the local music streaming landscape; this

has had particularly severe repercussions for artists and fair remuneration. Data initiatives such

as Revenue Streams for African Musicians could thus be helpful for assisting artists in identifying

the most ecient avenues through which creators can seek revenue. For policymaking, there

is also the need for additional data disaggregation (e.g. by gender, age, ethnicity etc.) so that

more specic data can be collected, published, and used to formulate targeted policies. On an

international larger scale, clear and quantiable indicators should be collectively developed by

industry stakeholders and implemented to help coordinate actions around common goals of

improving the fairness and transparency of remuneration models and support diversity.

¢ A holistic and collaborative approach must be employed to ensure that individual

initiatives have optimal impact. In consideration of challenges which are more prevalent in

certain regions than others (such as lack of access to technology and the digital skills gap), an

integrated approach – both within the music streaming industry and geographically – must

be pursued. Within local streaming industries, all stakeholders (including those who work in

label companies and streaming platforms) must be given the opportunity to get involved in

strategic discussions, such as through the creation of syndicates or through participatory policy-

making and open forums, to collectively determine how fair remuneration and diversity can

be better supported at all levels in the music value chain. These initiatives can be extended

globally through international networks and peer-learning initiatives to help mitigate regional

challenges. Additionally, policymakers can help stakeholders who place fair remuneration and

diversity at the core of their business model thrive through investments, subsidies, or training to

help scale proof-of-concepts, while also helping to fund research which serves to continuously

improve these two objectives.

¢ Artists should be empowered to leverage the impact and signicance of patronage

or fan-centred remuneration models. Initiatives should seek to support artists who want to

invest in building a relationship with their fans through streaming platforms and equip them

with the tools and skills to monetize those relationships. In the current landscape, it is likely

that the best road to generating revenues through music streaming for artists is to multiply the

digital channels in which their music is made available and to diversify their digital strategy.

¢ Support diversity within and beyond music streaming. Investing in diversity-centric

training, developing support schemes that empower stakeholders who belong to marginalized

groups, involving equality, diversity, and inclusion specialists in policy development, and

enhancing cultural and artistic education are essential steps to protect and promote the

diversity of cultural expressions, both within and beyond music streaming.

IV.

NOTES

1. IFPI. (2022). IFPI Global Music Report 2022 ‑ State of the Industry. www.ifpi.org/

wp‑content/uploads/2022/04/IFPI_Global_Music_Report_2022‑State_of_the_

Industry.pdf

2. Mulligan, M. (2022, January 18). Music subscriber market shares Q2 2021.

MIDiA Research. www.midiaresearch.com/blog/music‑subscriber‑market‑

shares‑q2‑2021.

3. Goldman Sachs. (2020). The show must go on. www.goldmansachs.com/

insights/pages/infographics/music‑in‑the‑air‑2020/report.pdf.

4. Fortune Business Insights. (2021, December). Video Streaming Market Size,

Share, Trends | Growth by 2028. www.fortunebusinessinsights.com/video‑

streaming‑market‑103057.

5. IFPI. (2022). IFPI Global Music Report 2022 ‑ State of the Industry. www.ifpi.org/

wp‑content/uploads/2022/04/IFPI_Global_Music_Report_2022‑State_of_the_

Industry.pdf.

6. Mulligan, M. (2022, January 18). Music subscriber market shares Q2 2021. MIDiA

Research. www.midiaresearch.com/blog/music‑subscriber‑market‑shares‑q2‑2021.

7. Goldman Sachs. (2020). The show must go on. www.goldmansachs.com/

insights/pages/infographics/music‑in‑the‑air‑2020/report.pdf.

8. Goldman Sachs. (2020). The show must go on. www.goldmansachs.com/

insights/pages/infographics/music‑in‑the‑air‑2020/report.pdf.

9. Spotify. (2022). Loud & Clear. Spotify. https://loudandclear.byspotify.com/.

10. Stassen, M. (2021, October 26). Here’s exactly what Spotify, Apple and

other streaming services want to pay songwriters from 2023 onwards. Music

Business Worldwide.

11. The Music Managers Forum and Featured Artists Coalition [MMFFAC]. (2020).

Written evidence submitted by the Music Managers Forum and Featured Artists

Coalition. https://committees.parliament.uk/writtenevidence/15289/pdf.

12. Mulligan, M. (2021, December 3). Music market shares: independent labels

and artists are even bigger than you thought. MIDiA Research.

www.midiaresearch.com/blog/music‑market‑shares‑independent‑labels‑and‑

artists‑are‑even‑bigger‑than‑you‑thought

13. The Music Managers Forum and Featured Artists Coalition [MMFFAC].

(2020). Written evidence submitted by the Music Managers Forum and Featured

Artists Coalition. https://committees.parliament.uk/writtenevidence/15289/pdf.

14. Kepios. (n.d.). Countries with the largest TikTok audience as of January 2022.

In Statista - The Statistics Portal.

www.statista.com/statistics/1299807/number‑

of‑monthly‑unique‑tiktok‑users/#:~:text=As%20of%20January%202022%2C%20

The,TikTok%20to%20watch%20short%2Dvideos.

15. World Intellectual Property Organisation. (2021, June 1). Report on the online

music market and main business models in Asia: Overview and general trends.

www.wipo.int/edocs/mdocs/copyright/en/sccr_41/sccr_41_7.pdf.

16. Fondo, M. and Bah, A. (2021, March 19). Developments of copyright and

related rights at ARIPO. www.aripo.org/success‑stories/recent‑developments‑

of‑copyright‑and‑related‑rights‑at‑aripo/.

17. Götting, M. C. (2021, November 5). Number of music streaming subscribers

worldwide from 2015 to 1st quarter 2021. Statista. www.statista.com/

statistics/669113/number‑music‑streaming‑subscribers/#:~:text=In%20the%20

rst%20quarter%20of,the%20rst%20quarter%20of%202021.

18. IFPI. (2021). IFPI Global Music Report 2021 ‑ State of the Industry.

https://gmr2021.ifpi.org/assets/GMR2021_State%20of%20the%20Industry.pdf.

19. World Intellectual Property Organisation. (2021, June 1). Report on the online

music market and main business models in Asia: Overview and general

trends. www.wipo.int/edocs/mdocs/copyright/en/sccr_41/sccr_41_7.pdf.

20. House of Commons Digital, Culture, Media and Sport Committee [HoC Report].

(2022). Economics of music streaming. Second Report of Session 2021-22.

https://committees.parliament.uk/publications/6739/documents/72525/default.

21. Goldman Sachs. (2020). The show must go on. www.goldmansachs.com/

insights/pages/infographics/music‑in‑the‑air‑2020/report.pdf.

22. Roberts, J.J. (2022, March 24). Grammy Winning DJ Diplo to Sell $99 Tokens in

New Single. Decrypt. https://decrypt.co/95900/diplo‑nfts‑tokens‑single‑royal

23. Owoh, U.O. (2022, May 3). How NFTs have empowered Artists in African Art

Scenes. Artsy. www.artsy.net/article/artsy‑editorial‑nfts‑empowered‑artists‑

african‑art‑scenes.

24. House of Commons Committees [HoC Committees]. (2021, July 15).

Music streaming must modernise. Is anybody listening?

https://ukparliament.

shorthandstories.com/music‑streaming‑must‑modernise‑DCMS‑report/index.html.

25. Spotify. (2021, February 22). Spotify Stream On. Spotify – For the Record. https://

newsroom.spotify.com/2021‑02‑22/todays‑spotify‑stream‑on‑announcements/.

26. iGroove. (2021, March 3). How many artists actually make bank on Spotify?

iGroove. www.igroovemusic.com/blog/how‑many‑artists‑actually‑make‑

bank‑on‑spotify.html?lang=en.

27. Spotify. (2022). Loud & Clear. Spotify. https://loudandclear.byspotify.com/.

28. MusicAlly. (2017, June 8). Deezer CEO Hans‑Holger Albrecht talks streaming

in 2017 (#midem). MusicAlly. https://musically.com/2017/06/08/deezer‑hans‑

holger‑albrecht‑midem/.

29. Centre national de la musique. (2021, January 27). Étude relative à l’impact

du passage à l’UCPS.

30. Bandcamp. (2022). Bandcamp for Artists. Bandcamp. https://bandcamp.com/

artists?from=hpartists.

31. Perpiñá-Robert Navarro, C, Strain, A. (2021). Spain’s audiovisual sector: fair

remuneration and economic growth. CISAC.

32. Lawrence, D. L. (2019, March). Addressing the Value Gap in the Age of Digital

Music Streaming. Vanderbilt Journal of Transnational Law, 52(2). https://

scholarship.law.vanderbilt.edu/cgi/viewcontent.cgi?article=1054&context=vjtl.

33. Directive (EU) 2019/790. (2019). Article 17. https://eur‑lex.europa.eu/eli/

dir/2019/790/oj.

34. WIPO Copyright Treaty. (1996). Article 8. www.wipo.int/edocs/pubdocs/en/

wipo_pub_226.pdf.

35. Gray, T. (2020, August). Written evidence submitted by Tom Gray (#BrokenRecord

Campaign). https://committees.parliament.uk/writtenevidence/10156/pdf/.

36. IFPI. (2021, July 5). IFPI and music groups in Brazil help tackle music streaming

manipulation. IFPI. www.ifpi.org/ifpi‑and‑music‑groups‑in‑brazil‑help‑tackle‑

music‑streaming‑manipulation/.

37. IFPI. (2021, July 5). IFPI and music groups in Brazil help tackle music streaming

manipulation. IFPI. www.ifpi.org/ifpi‑and‑music‑groups‑in‑brazil‑help‑tackle‑

music‑streaming‑manipulation/.

38. Music in Africa. (2019). Music In Africa Gender@Work | Music In Africa. Music In

Africa. www.musicinafrica.net/genderatwork.

39. Hang, I. (2021, April 6). Digital Music in Cambodia. The Sound Initiative.

www.thesoundinitiative.com/blog/2021/4/6/music‑40‑digital‑education‑for‑

artists‑and‑producer.

40. The Sound Initiative Music Academy. (2021). Future of Creativity: The State of

Play. https://static1.squarespace.com/static/58ad0a3f414fb535237b20b2/t/

61fa012d89fab36201f87316/1643774266724/Future+of+Creativity‑

+The+state+of+play.pdf.

41. Deedo. (n.d.). Deedo – Pan African Music Streaming. Deedo. https://deedo.io/en.

42. International Telecommunication Union (ITU). (2021). Measuring digital

development: Facts and gures 2021. ITU Publications.

43. Ochai, O. (2022). New opportunities and challenges for inclusive cultural

and creative industries in the digital environment. In Re|Shaping Policies for

Creativity: Addressing Culture as a Global Public Good. https://unesdoc.unesco.

org/ark:/48223/pf0000380474?posInSet=1&queryId=abe753e7‑4cc7‑4b33‑

a405‑fd5e66c19fe2.

44. Afreximbank. (2020, January 17). Afreximbank Announces $500‑Million

Creative Industry Support Fund as CAX WKND Opens. African Export-Import

Bank. www.afreximbank.com/afreximbank‑announces‑500‑million‑creative‑

industry‑support‑fund‑as‑cax‑wknd‑opens/.

45. Neely, A. (2020, April 9). Apple Music’s ‘Stream Local’ initiative will support South

African musicians. AppleInsider. https://appleinsider.com/articles/20/04/09/

apple‑musics‑stream‑local‑initiative‑will‑support‑south‑african‑musicians.

46. The Online Streaming Act (Canada). (2022). www.parl.ca/DocumentViewer/

en/44‑1/bill/C‑11/rst‑reading.

47. Government of Canada. (2022, February 2). Government of Canada

Introduces Legislation to Support the Next Generation of Canadian Artists and

Creators. Canada.ca. www.canada.ca/en/canadian‑heritage/news/2022/02/

government‑of‑canada‑introduces‑legislation‑to‑support‑the‑next‑

generation‑of‑canadian‑artists‑and‑creators.html.

48. Ragya. (n.d.). Ragya ‑ Indian classical music played by time of the day.

www.ragya.com/.

49. Knibbe, J. (2020, October 6). Understanding music discovery algorithms ‑ How

to amplify an artist’s visibility across streaming platforms. Music Tomorrow.

www.music‑tomorrow.com/blog/understanding‑music‑discovery‑algorithms‑

how‑to‑amplify‑an‑artists‑visibility‑across‑streaming‑platforms.

50. Midem. (n.d.). Midem Workshop sessions. Midem. www.midem.com/en‑gb/

conferences/midem‑workshop‑sessions.html.

51. Station. (n.d.). Shuruq Open Call | stationbeirut5. Station Beirut.

www.stationbeirut.com/shuruq‑open‑call.

52. IFPI, 2021.

53. Music in Africa. (2021). Revenue Streams for African Musicians. Music In Africa.

www.musicinafrica.net/rsfam.

54. House of Commons Digital, Culture, Media and Sport Committee [HoC Report].

(2022). Economics of music streaming. Second Report of Session 2021-22.

https://committees.parliament.uk/publications/6739/documents/72525/default/.

55. CISAC. (2020, December 2). KOMCA press release: Best Practice for establishing

a Transparent Distribution System: making payment details available anywhere,

anytime, with exclusive application. www.cisac.org/Newsroom/society‑news/

komca‑press‑release‑best‑practice‑establishing‑transparent‑distribution?fbclid=I

wAR3mMj65gso‑NP_j7yxj1Tt5TGrkZL4bPnTGQ61atpU4a8Ee0FVESaQT_68.

56. Epps-Darling, A, Takeo Bouyer, R, and Cramer, H. (2020, October). Artist

Gender Representation in Music Streaming. Proceedings of the 21st ISMIR

Conference. https://program.ismir2020.net/poster_2‑11.html.

57. Mulligan, M. (2021, December 3). Music market shares: independent labels

and artists are even bigger than you thought. MIDiA Research.

www.midiaresearch.com/blog/music‑market‑shares‑independent‑labels‑and‑

artists‑are‑even‑bigger‑than‑you‑thought.

58. Spotify. (2022). Loud & Clear. Spotify. https://loudandclear.byspotify.com/.

en.unesco.org/creativity

PERSPECTIVES

FOR THE DIVERSITY OF

CULTURAL EXPRESSIONS

PERSPECTIVES for the diversity of cultural expressions

isa series of policy briefs intended to inform and inspire

discussions among the Parties to the 2005 Convention

on the Protection and Promotion of the Diversity

of Cultural Expressions. Its objective is to identify

emerging trends in the creative sector, to analyse recent

developments in specific thematic areas and to offer

perspectives to the Parties and governing bodies of

the 2005 Convention. Each edition provides a concise

overview of a given topic, on the basis of existing

quantitative and qualitative data and information and

identifies strategic areas of medium- and long-term

intervention to support the development of informed,

transparent and participatory systems of governance

for the creative sectors.