The music streaming industry has been revolutionised over the past decades. From physical discs to instantaneous access, streaming music has never been easier. However, with infinite access and centralised control, does the music streaming industry need regulation?
Spotify is the most popular online music streaming platform, boasting 381 million monthly paying users. Spotify’s business model is based on a proportional distribution of profits each month depending on its premium subscribers. However, what many do not know is that there is a secret industry of “stream botting” whereby individuals or groups repeatedly boost streaming plays to skew profits. Since the pool of money is capped each month, artificially inflated numbers pull profits away from smaller artists and fuel larger and more famous musicians. Due to a lack of regulation, no one can regulate the actions of Spotify which enables Spotify to independently determine how royalty payments are to be distributed. Unfortunately, this exploitation has caused smaller artists to lose money each month, as it costs money to upload music to Spotify.
The UK Parliament has acknowledged this issue and launched an inquiry into the Economics of Music Streaming. The inquiry details the:
· effect of pay disparity on smaller artists
· need for equitable remuneration
· unseen control of record labels
· market dominance of companies such as Spotify, Google Play, and Apple music, and
· inconsistent use of legislation, particularly safe harbour provisions for copyright infringement.
In a billion-dollar industry, the UK’s inquiry is considering whether government intervention and regulation is required to rein in the control of these music streaming platforms. It is likely that similar regulatory investigations will happen in other countries around the world to protect artists from unfair exploitation