It's Time To Challenge The Flow – IMPALA's 10 point plan to make streaming work

Brussels, 23rd March 2021

IMPALA, the European independent music companies’ association in Europe, has published a ten-point plan to reform streaming. We see music services as partners, and our aim is to make streaming fairer and provide a dynamic, compelling and responsible future for creators and for fans.
 
We start by calling for an end to safe harbour privileges that distort the market. Avoiding new loopholes is a priority as the EU copyright directive is currently being implemented at national level.  We urge countries to “protect their creative artists – not timidly, but fiercely.”
 
We also have asks for labels. Our plan rejects equitable remuneration (for performers to negotiate with services for a parallel fee). Instead, we ask record labels to pay artists a fair contemporary digital rate.  We also recommend label search as a way for services to become more dynamic.
 
Differentiation in rates by services is one of our main themes. We have several proposals to shift how revenue is generated and allocated. We oppose reducing royalties for plays or privileged treatment in algorithms or other features, because “this is payola”. IMPALA also asks services to do more to address ad-blocking and streaming manipulation because they remove value from the system.
 
Mark Kitcatt, Co-owner and MD of Everlasting Popstock and Chair of IMPALA’s streaming working group, commented: “We spoke to members to get a feel for what streaming can and should offer, and how we can get there. We have an array of ideas to deliver greater income and opportunity to creators, and greater value to fans. The safe harbour experiment has failed on both those fronts -  it needs to be put away for good. Labels must pay contemporary digital royalty rates to all artists. And then we can put fans and artists at the centre of a plan to unlock the true potential of streaming for this industry.”

Helen Smith, IMPALA's Executive Chair added: “We need to change the streaming status quo. Our conclusion says it all. The independent music community stands with artists, ready to help build better models for creators, consumers, services and the environment to make the most of the promise of streaming. Our proposals will also be useful for EU countries implementing the copyright directive. Exempting short clips for example would be a giant step back in time. We hope Germany and others are listening.”
 
Paul Pacifico, CEO of UK Association of Independent Music (AIM) concluded: “It is vital to explore innovative solutions to streaming. It is also time to look beyond old world mechanics like equitable remuneration and into models that will work for a better streaming future. This paper will be helpful in setting out some of the tools that can really make a difference and achieve a more diverse and healthy music ecosystem.”

IMPALA’s streaming proposal comes at a critical time for the music sector, which will be one of the last to come out of the covid crisis. More support for artists, freelancers and small businesses is a top priority in IMPALA’s second wave recommendations to boost recovery.
 
Click here to see IMPALA’s full paper on streaming It’s Time To Challenge The Flow.
 
And for IMPALA’s 10-Points to Fix Streaming: 
 
1. End safe harbours effectively - no new loopholes.

2. Pay artists a fair contemporary digital royalty rate.

3. Reform allocation of streaming revenue. Different services may wish to explore any or all of the following proposals:

1. a)    Differentiation of rates:

I.    Pro Rata Temporis Model - To deal with the value imbalance for long-form music content, for example by having a rate for the first 30 seconds to 5 minutes of a song, then further payments triggered at 5 minute intervals until 15m 30s.
II.    Active Engagement Model - Encourage artists to stimulate active fan engagement by attaching a premium value to tracks which the listener has sought out or reached by artist, track or album name, or where she has saved, “liked”, or pre-ordered an album or track, for example.
III.    Artist Growth Model - Enabling artists to accelerate revenues to a sustainable level thereby supporting a broader diversity of emerging, and credible niche talent. The top tier streams would generate a bit less and bottom ones a bit more to help emerging and niche artists.
IV.    User Choice Model - Facilitate spaces within services for rightsholders to develop incremental revenues through direct relationships with fans, eg by offering access to extra tracks, better audio, and features.
b)     No threshold for a song to start generating revenue from streaming.

4. Assure there will be no reductions in royalties in exchange for enhanced plays, or privileged treatment in algorithms, or other features that recreate elements of payola.

5. Agree and enable revenue enhancement mechanisms in markets where the services are failing to convert users to paid models.

6. More vigilance by music services on unlawful activity that removes value from creators, including streaming manipulation, ad-blocking and stream-ripping software.

7. Enable search by labels / performers / producers / composers / musicians / authors / publishers.

8. Boost local repertoire and languages by better profiling in playlisting and other features, as well as having track titles in more than one language or specific, and ringfenced funding mechanisms allocated to investment in new, local recordings.

9. Work collaboratively with a spectrum of labels, across all markets (e.g. through Merlin for independents) to ensure editorial algorithm developments don’t negatively affect diversity, local repertoire and opportunities for artist discovery.

10.  Work with the recorded music sector to help assess and reduce the carbon footprint of digital music.

The independent music community stands with artists, ready to help build better models for creators, consumers, services and the environment to make the most of the promise of streaming.

About IMPALA
IMPALA was established in 2000 and now represents over 5000 independent music companies. 99% of Europe’s music companies are small, micro and medium businesses and self-releasing artists. Known as the independents, they are world leaders in terms of innovation and discovering new music and artists – they produce more than 80% of all new releases and account for 80% of the sector’s jobs. IMPALA’s mission is to grow the independent music sector sustainably, return more value to artists, promote diversity and entrepreneurship, improve political access, inspire change, and increase access to finance.