EU demands major overhaul to ensure fairer pay for artists on music streaming platforms

In a proposal that would stimulate sweeping changes in the industry, the European Union have implored major music streaming platforms to fix the “imbalance in revenue allocation” and deliver higher rates of pay for artists and songwriters.

On Wednesday, Members of the European Parliament (MEPs) voted overwhelmingly in favour of new legislation to address concerns regarding inadequate streaming royalties for artists and biased recommendation algorithms. The resolution also highlighted that, at present, no existing EU rules apply to music streaming platforms, despite being the most popular mode of music consumption.

The proposition was motioned to ensure the visibility and accessibility of European musical works and avoid the “overwhelming amount” of content being added to streaming services. MEPs also called for the revision and overhaul of outdated “pre-digital” royalty rates, imploring the industry to explore “fairer models of streaming revenue allocation” for artists and creators, including pro-rata and user-centric models.

Currently, digital music platforms and streaming services provide access to up to 100 million tracks either for free or for a comparatively low monthly subscription fee. Streaming represents 67% of the music sector’s global revenue, with an annual revenue of 22.6 billion USD, or 20.75 billion EUR.

Despite the obvious profitability of such platforms, countless independent or smaller artists are left with abysmal payout rates, with many as low as €0.001 per stream. The current global streaming model pioneered and hegemonized by Spotify, Apple Music, Youtube and Amazon Music leaves a majority of creatives with substandard rates of pay and often prevents them from sustaining careers in the recording industry.

On the subject of transparency and artificial intelligence (AI), streaming platforms are also being urged to make their algorithms and recommendation tools explicit to prevent unfair practices, such as the manipulation of streaming figures.

In line with the terms outlined in the EU’s Artificial Intelligence Act—which was passed in December and forms the world’s first comprehensive piece of legislation regulating the use of AI—MEPs suggested introducing a label to inform listeners of songs generated by AI and urge the platforms to adequately address and ban the use of deepfakes, which nonconsensually employ identities, voices and likenesses of artists.

Finally, legislators recommended the passage of legislation to include diversity indicators to assess the array of independent artists and genres and languages available on streaming platforms. MEPs cite studies indicating that revenues in the streaming market go primarily to major labels and a small minority of top artists, while the less popular styles and less common languages receive less attention and streams.

“The Parliament is giving voice to the concerns of European creators, who are at the heart of the music streaming market,” said rapporteur Ibán García del Blanco in the EU press release.

He continued: “Cultural diversity and ensuring that authors are credited and fairly paid has always been our priority; this is why we ask for rules that ensure algorithms and recommendation tools used by music streaming services are transparent as well as in their use of AI tools, placing European authors at the centre.”

While European legislators have staggeringly demanded services and platforms to address these issues, the resolution itself is non-legislative and non-binding. Instead this is an appeal to the European Commission to confront the matter and institute legislation to ensure the music streaming sector is fair and sustainable, and to promote musical diversity.