EU Parliament calls for overhaul of streaming industry

Recently, MEPs voted in favour of setting up a new EU legal framework to ensure artists are fairly compensated.

One of the major proposals in the vote is the revision of pre-digital royalty rates to allow for fair pay of authors. The other is the scrapping of payment schemes that force authors to accept lower or no revenues in exchange for greater visibility.

The resolution also called for European musical works to be visible, prominent and accessible on streaming services, with a hint at potential quotas to enforce this.

The lawmakers also want digital service providers to “make their algorithms and recommendation tools transparent and to add labels to any tracks that are AI-generated.”

While the resolution itself is non-legislative, industry insiders say the vote serves as a plea for the European Commission to acknowledge the main concerns around music streaming and initiate legislation to address it.

The European Parliament has received praise for the vote, with many stakeholders terming it as timely.

The European Independent Music Companies Association (IMPALA) welcomed the vote, with executive chair Helen Smith saying the call for modern digital rates is preferable in her members’ eyes to “so-called new ‘equitable remuneration’ rights which some parts of the sector are calling for.”

The European Grouping of Societies of Authors and Composers (GESAC) has also applauded the vote, calling it “a strong signal of recognition and understanding of the needs of creators.”

Spanish politician Ibán García del Blanco praised the European Parliament for giving a voice to the concerns of European creators, who are at the heart of the music streaming market.

“Cultural diversity and ensuring that authors are credited and fairly paid has always been our priority,” he said. “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.”

In recent years, streaming services have come under pressure to introduce better terms for artists whose music appears on their platforms. In November, Spotify announced that it would introduce changes to its royalty payments from early 2024, including a policy that requires tracks to achieve a minimum of 1 000 plays every year in order to receive royalties, a move that has been criticised widely.