More on “equitable remuneration”
The debate in some countries around performer remuneration tends to centre around whether artists should have a new right to “equitable remuneration”. As explained above, this is something we don’t support because our assessment is that it would deplete value from the commercial market, would reduce capital for investment in new artists and projects and would certainly not result in greater pay-outs to artists. “Equitable remuneration” simply does not mean “fair payment” in the sense it is commonly understood. It is a legal mechanism that allows for compensation to be paid to rightsholders whose work is uses where they have no right to say “no” or to negotiate a payment, such as radio or public performance. The model on which equitable remuneration is based pays up to 200 times lower than streaming. The system would be far from equitable, especially for emerging artists. For more on this, read our note on artist revenue and equitable remuneration
as well as a note on why equitable remuneration got rejected during the negotiations on the copyright directive
. Proper royalty deals is the answer, plus differentiation by streaming services to reallocate revenues meaningfully. The “equitable remuneration” model is not suitable for streaming. Streaming is core business, not radio! It is core business where rightsholders should be able to say yes (or no) and negotiate commercial terms.
IMPALA’s Executive Chair Helen Smith spoke of how the independent sector aims to maximise artist revenues and what it sees as the solution in an Op-Ed
for Creative Industries Newsletter entitled ‘We don’t believe equitable remuneration is equitable at all’. IMPALA also published a statement
pointing to streaming reform and to national negotiated sector agreements as the way forward, in contrast to the Belgian copyright rules
adopted in June 2022 which include “equitable remuneration” provisions. As we explain in this statement, IMPALA is fully supportive of the full performer package in the Directive but does not agree with grafting on additional rights such as “equitable remuneration”.
Commenting on the question of equity in streaming reform in a section of IMPALA’s annual equity, diversity and inclusion report from October 2022 entitled “Cutting the digital pie – what is equitable
?”, Ben Wynter – AIM Entrepreneur and Outreach Manager, co-founder of POWER UP and founder of Unstoppable Music Group – said: “For people from a low socioeconomic background and particularly people of colour, streaming has been a game changer. Whilst there is no doubt that streaming reform would benefit many, my concern is that in any reform there will always be a loser. The majority of solutions that I have seen would have a detrimental impact on those from low socioeconomic backgrounds as income would be repurposed from their share elsewhere, threatening to dismantle the democratisation that exists. This is why I find it hard to support solutions such as “equitable remuneration”. When searching for a solution, it is important to take into account the wider impact on ALL creatives that changes to streaming would have.”
Ben further commented: “We have to be honest about who the winners and losers would be and the long term impact those changes would bring. We need to ask ourselves what the long term effect will be on business, investment, creativity and innovation. For example “equitable remuneration” would inevitably lead to smaller label advances and lower royalty rates, which disproportionately affects certain groups. We need more resources for investment in new artists and projects, not less. We also need to think about artists who prefer to own their rights. Exclusive rights are essential for artists and labels and trying to pour everyone into a single mould is simply not an inclusive approach
The results from a study in the UK done by economic experts Will Page and David Safir for AIM and co-funded by IMPALA are also interesting. The study focusses on the Artist Growth Model (a proposal put forward by AIM, which is also one of the suggested approaches in IMPALA’s streaming plan
). The authors summarised their conclusions on impact of this model alongside the status quo and the likely impact of equitable remuneration in the table below.
They concluded that equitable remuneration would lead to:
- Significant upside for DSPs with less value flowing through the industry and to artists
- Increased administration costs to be borne by industry – and ultimately artists
- A decrease in transparency for artists
- A decrease in investment in artists – and particularly new artists
- A potential loss of choice for artists – particularly if equitable remuneration results in a drift towards blankets
This assessment was substantiated by the findings of a significant AIM member who submitted an outline impact assessment of equitable remuneration on streaming.
The UK study is based on real data supplied by the Entertainment Retailers Association on the top 10,000 tracks over 4 months. The figures are taken from March 2021. You can watch here
a recording of the webinar organised by AIM where Will Page and David Safir presented their research results. On the same page, you will find links to the experts presentation and to an extended Q&A.