10 steps to reform streaming models

IMPALA has a ten-point plan to reform streaming (click here for infographic summary)Seeing music services as partners, IMPALA’s aim is to make streaming fairer and provide a dynamic, compelling and responsible future for artists, labels and for fans.

18 months after the plan was adopted, IMPALA issued a call for renewed collaboration. This also links to our work on equity, diversity and inclusion, which is flagged by Ben Wynter in in a section of IMPALA’s annual equity, diversity and inclusion report from October 2022 entitled “Cutting the digital pie – what is equitable?”.

Differentiation in rates by services is one of the main themes in our streaming plan, so we have several proposals to shift how revenue is generated and allocated –  Pro Rata Temporis, Active Engagement, Artist Growth, User Choice (explained below, point 3 and in the plan). 

On the question of user centric, IMPALA’s plan concludes that “user-centric pay-outs feel more appealing to some who like the idea of their money going to the artists they listen to. We are ready to explore this option and scrutinise the pros, cons and unintended consequences of some services choosing the user-centric model. We feel, though, that on its own it won’t create the optimal market for artists, just a different set of artists who gain and lose, without growing the market or embracing other dynamics which we feel are needed to achieve change.”

Our plan rejects so-called equitable remuneration (for performers to negotiate with services for a parallel fee, in line with the outcome on the EU directive – for more on IMPALA’s position on this see here). Instead, we ask record labels to pay artists a fair contemporary digital rate.  We also recommend services facilitate label search and tracks titles in multiple languages as a way for services to become more dynamic. We have a whole host of recommendations for services to really boost local markets in Europe. 

Our plan is underpinned by a call for an end to safe harbour privileges and avoid new loopholes. With the EU copyright directive being implemented at national level, we don’t want any new value gaps through short clip exceptions for example.  We urge countries to “protect their creative artists – not timidly, but fiercely.” This is important because when we adjust trade revenues for inflation, the European market today is only 35% of its 2001 value.

Coming out clearly against reducing royalties for plays or privileged treatment in algorithms or other features is also there, because we see this as payola. IMPALA asks services for the independents to have a seat at the algorithm table. We also call on services to do more to address ad-blocking and streaming manipulation because they remove value from the system.

Our final point addresses the vital question of sustainability – we invite services to work with us to reduce the carbon footprint of digital music. 

Our ten points are below and IMPALA’s full paper is available here – It’s Time To Challenge The Flow.

Click here for the 10-point in infographic form.

IMPALA’s statement on the day of publication is here

You can also listen to an overview of our streaming plan on our #20MinutesWith podcast here with Paul Pacifico, CEO of the UK’s independent music companies association AIM, hosted by journalist Juliana Koranteng.

IMPALA’s 10 Points: 

1. End safe harbours effectively – no new loopholes.

2. Pay artists a fair contemporary digital royalty rate. (Note, we don’t support “equitable remuneration because it’s not equitable, see more here).

3. Reform allocation of streaming revenue. Different services may wish to explore any or all of the following proposals:

a)    Differentiation of rates:

I.    Pro Rata Temporis Model – To deal with the value imbalance for long-form music content, for example by having a rate for the first 30 seconds to 5 minutes of a song, then further payments triggered at 5 minute intervals until 15m 30s.

II.    Active Engagement Model – Encourage artists to stimulate active fan engagement by attaching a premium value to tracks which the listener has sought out or reached by artist, track or album name, or where she has saved, “liked”, or pre-ordered an album or track, for example.

III.    Artist Growth Model – Enabling artists to accelerate revenues to a sustainable level thereby supporting a broader diversity of emerging, and credible niche talent. The top tier streams would generate a bit less and bottom ones a bit more to help emerging and niche artists.

IV.    User Choice* Model – Facilitate spaces within services for rightsholders to develop incremental revenues through direct relationships with fans, eg by offering access to extra tracks, better audio, and features.

b)     No threshold for a song to start generating revenue from streaming.

4. Assure there will be no reductions in royalties in exchange for enhanced plays, or privileged treatment in algorithms, or other features that recreate elements of payola.

5. Agree and enable revenue enhancement mechanisms in markets where the services are failing to convert users to paid models.

6. More vigilance by music services on unlawful activity that removes value from creators, including streaming manipulation, ad-blocking and stream-ripping software.

7. Enable search by labels / performers / producers / composers / musicians / authors / publishers.

8. Boost local repertoire and languages by better profiling in playlisting and other features, as well as having track titles in more than one language or specific, and ringfenced funding mechanisms allocated to investment in new, local recordings.

9. Work collaboratively with a spectrum of labels, across all markets (e.g. through Merlin for independents) to ensure editorial algorithm developments don’t negatively affect diversity, local repertoire and opportunities for artist discovery.

10.  Work with the recorded music sector to help assess and reduce the carbon footprint of digital music.

*Not to be confused with user centric, which we don’t propose.

The independent music community stands with artists, ready to help build better models for creators, consumers, services and the environment to make the most of the promise of streaming

IMPALA – Independent Music Companies Association

Rue des Deux Eglises 37-39, 1000, Brussels, BELGIUM

+32 2 503 31 38