As Streaming Increases, the Rights of Performers Internationally Is Making Progress

February 19, 2020

Alan Willaert  -  AFM Vice President from Canada

A recent article in Music Business Worldwide quoted some impressive statistics released in BuzzAngle’s yearly report. For the first time, on-demand streams in the United States eclipsed the one trillion mark, with 705.9 billion being audio and 304.1 billion video. Over the previous year, that represents a total increase of 32% in audio and 10.6% in video.

Meanwhile, actual sales continued to fall significantly:

• Online song sales were down 26.3% to 295.1 million units.

• Online album sales were down 23.2% to 93 million units.

• Digital album sales declined 26.6% to 37.3 million units.

In terms of physical product, CD sales fell 26% to 44.9 million units; cassette sales were down 11.5% to 104,600 units. Vinyl sales rose 10.5% to 10.7 million units.

Post Malone was the most-streamed artist of 2019 with 6.7 billion on-demand streams, edging Drake at 6.3 billion. However, Drake remains the most-streamed artist over the last five years, with 28 billion on-demand streams, versus Post Malone at 15.9 billion.

Some other statistics reveal surprising facts. The top five artists in 2019 (Post Malone, Drake, Billie Eilish, Ariana Grande, and YoungBoy Never Broke Again) accounted for 21.8 billion in total audio streams. For the first nine months of 2019, Spotify’s “cost of revenues” (mainly made up of royalty payments to rightsholders) was 4.13 billion. If the top 10 artists received a cut of that money in line with their US streaming market share (5.09%), they would have been paid $210 million between them.

However, in 2018, the market share for the top 10 artists was 6.66%, or $224 million—indicating a greater share of the total streams for the year before. Meanwhile, Spotify’s cost of revenues leapt up by $760 million for 2019, raising the question, where did that additional money go?

Mysteries such as this are the subject of the streaming conferences sponsored by the International Federation of Musicians (FIM), the latest one being attended by President Hair and myself and hosted by the Musicians’ Federation of India in early December. Also being compared were the rights that performers have in that part of the world and other countries. As has been stated before, there are international treaties in place (such as the WIPO Performance and Phonograms Treaty) that many countries have signed and ratified; however, compliance may be quite different in each due to “national treatment,” which is the ability for a country to adopt a higher or lower compliance, within a given range.

While the major recording labels have offices and activities in almost all of these countries, including India, only the AFM has negotiated a collective agreement governing the payments and benefits for musicians. This creates extreme variances on how musicians are dealt with by the labels, which affects not only direct payments but royalty streams from back catalogue distribution. While no easy task, nor a short-term goal, one of the objectives of FIM is to bring the standards closer together through lobbying for statutory laws as well as union activity.

One need only look at the host country’s scene to determine how vastly different the industry is. In India, 80% of popular music “breaks” because it is contained in a Bollywood film, while the reverse is true elsewhere—music that is already popular is licensed into television and motion pictures.

Another anomaly experienced by our hosts is the fact that the union representing vocalists has been extremely active, lobbied for adherence to international treaties, and forced employers to comply through court action, thereby ensuring singers receive proper royalties for the use and repurposing of their product. However, the musicians’ union is much further behind on its political activity, and, to date, has been unable to leverage the same laws. Through the work done at this latest conference—and in no small part due to AFM President Hair’s influence—there is now dialogue between the two performers’ unions, with a potential for the musicians to share in the royalty streams to which they are, by law, entitled. In India, that’s a huge step forward, and internationally, real progress.

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