What The European Commission’s Music Revenue Proposal Means For You

The European Commission has today proposed a list of rules which call for a “fairer environment” for the digital world, in particular online services. This move has been welcomed by music trade organisations looking to close the huge gap in income between music and its creators.

The main goal is to establish “comparable rules for comparable digital services,” as well as an “obligation for online platforms to behave responsibly,” the long-term strategy being to create a single digital market across the European Union affecting audiovisual services and e-commerce.

This follows a report from the European Union Intellectual Property Office (EUIPO) claiming $190 million, equal to 5.2 percent of all music sales, was lost in the European Union in 2014.

EUIPO’s executive director António Campinos said that “Our study’s results are in line with the prevailing consensus and find that piracy reduces the revenue of legitimate industry in both digital and physical formats.”

What does this mean for the everyday listener?

With music streaming growing exponentially and Apple allegedly planning to scrap downloads altogether, on-demand digital music is one of the most, if not the most, widely-used service for music consumption. Despite boasting audiences of over 100 million listeners though, the payout per stream from Spotify and Apple Music is still miniscule. Spotify for example pays between $0.006 and $0.0084, meaning an artist would need around 120 to 160 streams to simply receive $1.

Dr. Harald Heker, CEO of the German royalty collecting society GEMA agrees that something must be done. “Platform operators which benefit financially from the exploitation of creative content must no longer be allowed to shirk their responsibilities to remunerate the creators of the works in a an adequate and fair manner.”

The industry and the artists want change and, if implemented correctly, closing the “value gap” could provide that much-needed boost in revenue. Whether it means increasing the payout per stream or pushing for an all premium service such as Apple Music, there could be some important decisions made if this proposal comes to fruition.

It will have to go before the European Parliament and the Council of Ministers first but, as BBC News pointed out in reference to changes imposed on Netflix, if it is adopted then it would be local regulators tasked with enforcing it, and even existing requirements are not always strictly adhered to. Nonetheless this is a step in the right direction in identifying the issues that the industry is facing, and will hopefully be implemented in one way or another.

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