The UK’s Digital, Culture, Media and Sport Committee’s inquiry into the economics of music streaming continued yesterday when Chief Executives Peter Leathem of Phonographic Performance Ltd. and Andrea Martin of PRS for Music as well as Tony Harlow of Warner Music UK, Jason Iley of Sony Music UK and David Joseph of Universal Music UK and Ireland served as witnesses to give evidence to the committee. The former, Peter Leather and Andrea Martin who are both heads of music licensing organisations gave detailed statistics including the amount of artists being paid royalties by them and explained how they are working with new developments in music distribution including streaming services and social media to ensure the artists and rights holders are being paid for their work.

They expressed concern at the so called ‘safe harbour,’ defence which has been plaguing the music streaming debate for a while now which involves services finding ways to avoid paying royalties to artists despite hosting their music. Leathem in particular expressed a strong willingness to work with the government in enforcing new regulations on the industry which may require streaming services or social media platforms to pay more royalties to musicians. However, while both Leathem and Martin did show a willingness to work with the government if new legislation was to be brought into place, there were some areas which both parties were keen to state that these were issues which ought to be raised with record labels, such as the controversial breakages clauses included in record deals where the majority of revenue is generated through streaming.

Artists have argued that clauses which stipulate a deduction of often as much as 10% be taken from their royalties to cover the cost of broken vinyl or CDs, are unfair when physical copies are not making up a significant amount of that revenue, with some even going so far as to claim that the labels are seeking to their own loss of revenue due to streaming at the artist’s expense.

Tune in to our third #MusicStreamingInquiry session with CMOs & music company CEOs:

– Andrea Martin, @PRSforMusic & Peter Leathem, @PPLUK
– David Joseph, @UMusicUK, Jason Iley, @SonyMusicUK & Tony Harlow, @WarnerMusicUK

More info: https://t.co/SheCv5v3Rk https://t.co/3H91Qmq9RY

— Digital, Culture, Media and Sport Committee (@CommonsDCMS) January 19, 2021

In the second portion of the inquiry held yesterday, which is the third instalment in a series of hearings which have been running periodically since October last year with a variety of witnesses being called, consisted of a tense series of questions being posed to record label bosses which was characterised by serial evasiveness by the bosses and increasing frustration for the MPs.

The most difficult question for the bosses to handle was in reference to Spotify claiming that certain labels had in 2017 agreed to allow them to reduce royalties in return for meeting certain economic targets. The MPs pressured the label bosses to state whether or not artists had suffered a reduction in royalties as a result of this deal but none of the executives were able to give a convincing answer, despite claiming that the amount of money they paid to artists has increased.