The UK chief executive of Universal Music, the home of stars including Taylor Swift, Lady Gaga and the Beatles, has said streaming deals reflect the success of biggest music artists – as it emerged it can take more than 1m streams to make £1,000.
David Joseph also told MPs that greater effort was needed to force more royalty payments from YouTube, which is responsible for the majority of music consumption but pays relatively small fees by taking advantage of loopholes in copyright laws.
In November, the Mercury prize-nominated singer-songwriter Nadine Shah told the digital, culture, media and sport select committee inquiry into the economics of music that despite her success and popularity she made so little from streaming that without income from live touring she was struggling to pay her rent.
On Tuesday, the committee quizzed the UK bosses of the world’s three biggest record companies – Universal, Warner Music and Sony Music – about who has benefited from the streaming revolution that has revitalised the music industry.
The MP Alex Davies-Jones said that according to industry body the British Phonographic Industry (BPI), record labels in the UK made £1.1bn in 2019 while a typical musician made just over £23,000, against a national average of £29,000, citing the Office for National Statistics.
Extracts of Shah’s testimony were read out to highlight how many artists are struggling.
“Nadine Shah is a wonderful musician, she is a fantastic songwriter,” said Joseph. “The amount of money an artist gets in terms of streaming, the model is based on certain parts of popularity, all of the streams are coming to us and other artists are based on popularity.
“It is true to say there are some artists who have been particularly badly hit by the pause in the live business because they have a relatively small fanbase but a very passionate fanbase they play live to very often. So inevitably their economy, as it were, has been very badly hit because playing live has not been available to them.
“Unfortunately it is not possible, and not logical, that that would be instantly replaced by the money they make from [the streaming of] their recordings. That was never how their earnings were shaped.”
The record company bosses were asked how many streams of a song were required for an artist to receive £1 of net profit.
Tony Harlow, the chief executive Warner Music UK, whose artists include Ed Sheeran and Coldplay, estimated 1m streams would make £4,000 to £5,000 in revenue and that a recording artist may see £1,000 of that.
“This is still a pretty new industry and the economics are working their way through,” he said. “We are increasingly seeing more artists getting to the million stream, billion stream, multibillion stream mark as the economics work better and better.”
Harlow said that in 2016 there were 582 Warner Music artists who hit 1m streams, and eight who reached 1bn. In 2020, 1,739 achieved 1m, 35 passed 1bn and four managed more than 10bn streams.
Joseph suggested that not all major platforms popular for music consumption were paying a fair share to labels and artists.
“I do not think streaming services are perfect,” he said. “I think there is lots more we can do for artists that I want to discuss. [But] it is hard against this backdrop of YouTube [where] 70% of the music of our artists [is] being consumed and giving us only 5% of our revenues.”