CEO of record industry group defends streaming services

Frances Moore, CEO of the International Federation of Phonographic Industries, made some waves and splashed some cool water of long-term thinking on the hot debate over artist payouts from streaming music services. Moore spoke at the ARIA Masterclass in Sydney, Australia.

In her remarks (PDF transcript here) about a global recovery of a recording industry disrupted by the digital shake-ups of MP3, piracy, download stores, and streaming music, Moore directly addressed controversy stoked by outspoken musicians David Byrne and Thom Yorke. Byrne and Yorke have objected to Spotify particularly, with product boycotts and sometimes scatalogical language. Moore’s overview on all that: “I do believe their concerns are overstated.”

Moore dove deeper into the IFPI’s perspective on streaming:

“Yes, such services shift us from a world where rights holders receive the bulk of their revenues in the weeks after an album or single’s release to one where they receive micropayments each time their work is played. That can be disconcerting. But the evidence is starting to build up which suggests that, over a period of time; income from streaming services can surpass that from download stores. It is easy to forget that services such as Spotify are just five years old, and it has been present in Australia since May last year. They are still in their infancy. But with time and scale, they can significantly add to industry income and they attract music fans away from pirate services which pay nothing to artists and record labels.”

A secondary argument that has recently entered the “Spotify debate” centers on the contractual terms by which recording artists are paid by their labels for streams of their tracks. Artists aggrieved by micro-royalty checks, the argument goes, should determine whether their labels are paying out the artist share by the old product model (low royalty percentage) or the new access model (higher licensing percentage). That line of reasoning, which applies to artists who don’t own their recorded masters, shifts responsibility from streaming services to record labels — the constituency represented by Frances Moore and the IFPI.

On a related note, Spotify itself launched an anchor site for musicians and anyone else interested in the business side of streaming music distribution. Called Spotify Artists, the site offers help guides for maximizing exposure, and — in what will surely be the most scrutinized portion — a clarifying explanation of how Spotify calculates royalties. 

Brad Hill