The European Parliament is calling for new regulations to ensure streaming services pay artists fairly. The proposal also calls for more transparency around how algorithms generate suggestions for which artists to stream and what tracks get the most promotion.
The proposed changes will be designed to ensure smaller artists are compensated fairly. Currently, royalty rates are set in a way that makes artists accept lower pay for the distribution of their content in exchange for visibility on streaming platforms like Spotify and Apple Music. The members of the European Parliament (MEPs) are primarily concerned with introducing new legal frameworks to help support artists.
MEPs believe that the current way royalties are distributed is unfair. Current algorithms favor major labels and artists when providing suggestions, making it more difficult for less popular and diverse genres to get exposure. “Cultural diversity and ensuring that authors are credited and fairly paid has always been our priority; this is why we ask for rules that ensure algorithms and recommendation tools used by music streaming services are transparent as well as in their use of AI tools, placing European authors at the centre,” rapporteur Ibán García del Blanco of Spain said.
As part of this call for change, the MEPs want there to be more regulation regarding the use of artificial intelligence. The actual implementation of a legal framework by EU regulators might take some time to come to fruition. Similarly, UK regulators also raised the issue of pay fairness on streaming apps and even started investigating the effects of algorithms on listening habits. It's no secret that streaming platforms account for more than half of the music industry’s revenue. Streaming represents about 67 percent of the music industry’s revenue on a global scale.