Counsel believe an agreement between French performance rights organisations and recording artists could provide the inspiration for other deals but may also spark new talks with streaming services.
In an announcement in May, France’s Ministry of Culture said that “after months of talks” a deal had been reached that guarantees performers a minimum royalty rate when their work is played on streaming platforms.
The deal stems from a request by the French government which, in May 2021, asked rights organisations to determine a fair remuneration for artists they represent. The request was in response to the EU Copyright Directive – France is in the process of transposing this into its national law – which requires “appropriate and proportionate” pay for performers.
Karine Disdier-Mikus, attorney at Fiducial Legal in Paris, says music producers, artists and trade unions have been at “loggerheads for years” over this issue.
One source adds that the agreement, which should be welcomed, should kick-start a wider discussion on the redistribution of wealth in the music industry.
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Reasonable royalties
At the moment, artists receive a direct fee per stream from the streaming platform in question, such as Spotify or YouTube. A fee is also paid to PROs.
The PRO fee is split between the artist, publisher and songwriter after the PRO has taken a cut.
However, rather than being based on an artist’s individual contract, as it is now (the amount an artist can receive varies by circumstance and could theoretically be almost nothing), the new agreement sets a fixed minimum fee of at least 10%.
The deal also allows for profit-sharing when a work reaches a certain level of success and additional remuneration for every 7.5 million streams a song receives.
The exact figures have yet to be published, but sources believe it could help speed up developments in other jurisdictions where similar deals are being encouraged, such as in the UK.
Among the organisations included in the French deal are the National Syndicate of Phonographic Publishing, the Civil Society of Phonographic Producers (SCPP), the Union of Independent French Phonographic Producers and the Civil Society of Phonogram Producers.
In a statement, a SCPP spokesperson said the agreement establishes a new framework that takes account of new uses of music consumption while “respecting the economic model of all music companies, regardless of their size, and their ability to produce and develop performers in France”.
Vanessa Bouchara, partner at Cabinet Bouchara in Paris, notes that this is still only an agreement between representatives of artists and the artists themselves.
The streaming companies themselves were not part of the negotiations and agreements, although their consent is not necessary, she adds. However, she believes it may yet provide the basis for future negotiations on the relationship between streaming companies and PROs.
New talks likely
Despite some organisations publicly welcoming the deal, sources believe that behind closed doors, PROs will be keen to ensure they can maximise their income from streaming platforms.
Hayleigh Bosher, intellectual property lecturer at Brunel University in London, and who researches the music industry, says it’s “highly likely that they [PROs] will try to renegotiate their agreements with the streaming platforms to try and increase the income to compensate for increased payments to artists”.
Disdier-Mikus says it is “more than likely” that the associations will approach streaming platforms to renegotiate their own agreements. Those discussions would “most certainly be quite intense,” she adds.
However, those conversations may be short-lived, as far as some streaming platforms are concerned.
Bosher notes that the price of Spotify has never changed – subscribers pay £9.99 ($12) per month for a premium subscription.
“I would take that as a signal that they have not previously been willing to re-negotiate,” she says.
“They argue that people won’t pay more because they can get cheaper or free options, but that excuse is wearing thin – particularly since Spotify offers more of a service for technically less money, as it didn’t even increase with inflation.”
Ultimately, she suggests, there needs to be a wider redistribution of wealth and that consumers should be paying more for access to music platforms.
One music industry source says stakeholders of all sizes continue to engage constructively in the various debates.
“It is important to ensure that the music value chain works as efficiently as possible for artists, especially at a time when more of them are succeeding through streaming than ever before,” the source says, adding that all parties will need to work together to “increase the size of the overall streaming pie”.
Across borders
Despite some details to be fleshed out, sources say there are other positive aspects to the agreement such as its potential to kick-start international change regarding fair remuneration.
In a statement sent to Managing IP, Roselyne Bachelot-Narquin, France’s minister of culture, said the agreement shows that players in the recorded music industry can find “innovative and ambitious solutions” in the debate over the value of online music.
In the UK, similar negotiations are ongoing following an inquiry into music streaming by the Digital, Culture, Media and Sport Committee.
In a report published in July last year, the committee called for a “complete reset” of the streaming and royalty payments process and the need to tackle other long-standing issues, including piracy.
Further, in a corporate strategy report published last week, May 12, the UKIPO said it wanted to make a decision in the next 12 months on any new policies to deal with unfairness in the music streaming industry.
The agreement in France could be a starting point and inspiration to encourage agreements in the UK, Bosher adds.
The in-house counsel at a UK-based performer’s rights group welcomes the agreement in France but says the UK music industry would still be calling on the government to do more to help reduce other issues that take away remuneration from artists, such as piracy.
This includes introducing a ‘duty of care’ requirement on online platforms to prevent infringing material, as well as faster and cheaper ways for right owners to secure blocking orders.
Sources note that UK performers could also benefit from the agreement reached in France.
Bosher says that it will benefit UK artists registered with one of the societies that have signed up to the deal, while Bouchara adds that artists will be paid not only for streaming in France but also abroad.
While the agreement may be broadly welcomed by those artists fortunate enough to have a French connection, the wider streaming debate has a long way to run yet.
