0333 014 4568

Does the music industry need reform in a digital age?

Make an Enquiry

Does the music industry need reform in a digital age?

‘No more parties in L.A.’ for Kanye, ‘but who will survive in America?’

New technology has always been the driving force of innovation in any industry, and the music business is no different. Understanding and developing new ways of distributing music has seen progression from gramophone records in the late 19th century to modern day high-resolution digital audio formats: FLAC, ALAC and WAV. Not forgetting everything else that fell in between: acetate, vinyl, compact cassette, 8-track, compact disc and MP3 to name but a few. Technology allows us to do things better and more efficiently than before, presenting new opportunities for individuals, businesses and consumers. You only need to look at how companies like Mondo plan to shake up the antiquated banking industry to understand the point. However, technology brings with it a number of challenges and in the body that follows we’ll examine some of the ones facing songwriters, performers and music labels.

‘The times they are a-changin’ - Bob Dylan

Songwriters have powered the music industry from behind the showbiz curtain for many years - penning smash hits for world famous artists Frank Sinatra and Elvis Presley in the 40s and 50s, as well as underwriting the success of modern day icons Justin Bieber, Rihanna and Taylor Swift. Remaining largely unknown, to those outside the industry, songwriters have rarely drawn the limelight despite their invaluable contributions; but now, with technology boosting our accessibility to their hard thought lyrics, they’re finding it increasingly difficult to survive.

Publishing deals have often safeguarded the interests of songwriters, but with consumers electing to predominantly listen to music in a digitally streamed format, the publishing industry has seen revenues fall - and that’s before we even entertain the damage of piracy.

This is due to the publishing rights for songs not being uploaded with the media file onto streaming sites, making it very challenging to identify, and pay, a song’s contributors. Even when royalties are paid, often the sums don’t add up: Kevin Kadish, the co-writer of ‘All About That Bass,’ a song viewed 1.1 billion times on YouTube, only earned $5,679 in royalties for a song that was streamed over 170 million times. It’s also estimated that at the end of 2015, music streaming services owed songwriters between $50 and $75 million in royalties. A figure expected to grow with new providers like Apple Music, already with 6.5 million subscribers, entering the market.

It’s also unlikely to get any easier for songwriters, who will often have to wait years for payment, whilst cogs in an old-fashioned machine struggle to cope with the exponential growth in demand for online music.

‘What’s a god to a non-believer?’ - Kanye West

The only thing worse than not getting all the royalties you are owed, is getting none. ‘Music piracy’ - the unauthorized distribution of copyrighted material - is an even greater threat to not only songwriters, but performers and record labels alike. IFPI believes that 20% of internet users worldwide regularly access unlicensed services and with BitTorrent search engines, like Pirate Bay, not hosting any illicit material it is difficult to apportion blame on them.

Kanye West’s much anticipated ‘The Life of Pablo’ was illegally downloaded over 500,000 times in the 2 days following its release. Despite attempts to restrict access by only distributing it through his music streaming site: Tidal. With some albums only selling 500,000 copies in their lifetime (and others even less), you can understand the damage this causes - Kanye himself claims to be in $53 million of debt, so even he could use the money.

The exclusivity of releasing the album only on Tidal and another outlandish tweet (stating his album would never be for sale, only on Tidal) to add to his extensive list, goes some way to explaining the torrent frenzy but doesn’t excuse it. The challenge is to find a way to stop torrent sites acting so freely, in what The Recording Industry of America has termed ‘a never-ending game that is both costly and pointless.’

Pirate Bay is so brazen in its activity, that they even wished ‘Mr. West’ good luck suing them.

‘Cause, baby, now we got bad blood’ - Taylor Swift

There is movement to rectify some of the injustices that music streaming seems to promote. Taylor Swift’s public tirade of abuse at Apple Music forced them to rethink their policy of not paying artist royalties when music was streamed by users on a trial; on the grounds it was “unfair to ask anyone to work for nothing.” Meanwhile, Spotify, who have paid over $3bn in royalties since launching in 2008, are committed to paying every penny but have struggled to do this on the back of confusion over who to pay.

It’s thought that paid-for streaming can be a successful alternative to downloading music, but there needs to be greater accountability and transparency, as well as better regulation on companies that are deemed to be under-licensed (YouTube) and un-licensed (SoundCloud.)

The music industry isn’t in danger of going out of business, and there will always be a need for songwriters, but there is an even greater need for reform in an industry moving through the digital age.


By Alex Clark

The contents of this article are intended solely for information purposes only and should not be construed as legal advice or financial advice or opinion in any specific facts or circumstances.

©2015 Hybrid Legal Limited.