This week CEO of the self-proclaimed ‘fourth major’ BMG, Hartwig Masuch, sent a message to the artists and songwriters signed to the company that concluded with the statement “I want you to know that we are on your side”.

Masuch’s message was, in particular, targeted at those signatories of the recent letters submitted by the #fixstreaming and #brokenrecord campaigns to the UK Prime Minister, Boris Johnson, and whilst his message did not go as far as endorsing the specific demands of those campaigns, he did make the significant declaration that BMG supports “a radical re-slicing of the streaming pie in favour of artists and songwriters”.

As a music lawyer who has just set up shop in Australia, I will explain one of the key ways in which the UK campaigns propose re-slicing the digital pie – equitable remuneration.

What is it?

There were two words that were at the core of the deep-dive by the British Parliamentary inquiry into the economics of music streaming – ‘equitable remuneration’ (“ER”). ER already exists as a form of statutory remuneration payable to performers when the recordings on which they performed are played on the radio or in a public space. In such a scenario, monies set by statute are paid to and collected by PPL (the UK’s equivalent of PPCA), and is then split 50/50 between the copyright owner (usually the record label) and performers. However, in most countries Equitable Remuneration is not paid in respect of streams.

What’s the benefit of ER to artists?

In short, the performer’s share of Equitable Remuneration is money that falls outside of any recording agreement to which an artist may be subject. Instead it goes straight into the artist’s pocket, providing them with a separate guaranteed source of revenue to the royalties paid (or credited towards recoupment) under their record deal. As for session musicians, they currently receive nothing from streams, so this would provide them with an entirely new income source.

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What has happened to date?

The Parliamentary inquiry held five sessions on the economics of music streaming, and included oral submissions from the likes of Guy Garvey from Elbow, Chic legend Nile Rodgers and the founder of the #BrokenRecord campaign, Tom Gray (of Gomez). It also heard from representatives from the three major labels, as well as the streaming platforms. It finally culminated in two open letters to British PM Boris Johnson, complete with over 230 signatories (including Sir Paul McCartney, The Rolling Stones, Kate Bush and Sir Tom Jones), calling for a reform to the way in which performers (and songwriters) are paid from streaming. Since then a Labour MP, Kevin Brennan, has presented proposed legislation to the British Parliament entitled the ‘Copyright (Rights And Remuneration Of Musicians etc) Bill’ which seeks to amend UK copyright law to “create a new right to fair remuneration for musicians when their work is played on streaming platforms”. Not much more is known about the content of the bill at this stage.

Will the legislation get passed?

It’s impossible to know at this stage, but Brennan’s bill is scheduled to be discussed in Parliament on 3rd December 2021.

Why should we care in Australia?

Whilst Brennan’s proposed legislation would only apply in respect of the UK, it could have profound implications on the industry more widely and set the precedent for other countries, including Australia, to follow suit.