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JOSEPH, ILEY AND HARLOW TALK STREAMING

The three U.K. major label CEOs—Universal U.K.'s David Joseph, Sony U.K.'s Jason Iley and Warner U.K.'s Tony Harlow—appeared before a government select committee on Tuesday to justify their share of the streaming pie and answer MPs’ probing questions.

The execs appeared in the third witness session of the ongoing inquiry into the economics of streaming. PPL’s Peter Leathem and PRS for Music CEO Andrea C. Martin also gave evidence.

In response to the accusation that the major labels and Spotify are essentially operating an oligopoly, Iley said: “There is more competition in the music industry now than in my 30 years of doing this job. The independent sector is brilliant and signing some of the best acts and there are opportunities for artists to sign to majors, independents or distribute their own music.”

When questioned about whether the economics of the music industry have caught up with the growth of streaming, Iley said that 80% of Sony’s U.K. revenue comes from streaming and that the label spends more money on A&R and marketing “than I’ve ever seen in my career.”

Over the course of his three years as CEO, Iley said he’s spent more than £190m on A&R, increased Sony’s labels to 15 from six and spent more than £170m marketing acts. On average, he said, he signs more than 50 artists per year and that it’s “rare” that an advance for an album deal is less than £200k, while single deals can reach up to £300k.

On the subject of whether any type of stream should be remunerated in the same way as radio broadcasts, rather than a sale, Iley, Joseph and Harlow disagreed, with the latter remarking: “Streams are deliberate choices; you listen to what you want and skip when you don’t and can decide how long you want to listen for, and streaming services allow you to bring recordings to listen to offline. That’s not like broadcast.”

Joseph picked up on the idea of implementing a user-centric streaming model, rather than the current marketshare one used by major streaming services, saying he’s supportive. “All streams coming to us and artists are based on popularity and there are other ways we can look at it—there are models where if you just listened to Nadine Shah that month, the model would just pay that artist,” he explained.

In addition, Joseph raised the idea of providing an option for non-algorithmic curation. “Streaming is at the start; it’s not perfect yet—I’ve got tons of ideas on how to improve streaming for the artist. There is so much growth in this area. I want liner notes; I want there to be a focus on the albums. If I signed up to Spotify, I’d love to get a choice between my data [being] tracked or [having] music served up by artists I loved and my friends. I’d like to have a service that isn't based on the algorithm.”

Following the debate, MMF CEO Annabella Coldrick welcomed the discussion but called for further action. "Now this conversation has started, we urge the major music companies to make good on their words and engage in an open dialogue with artists and their representatives about how licensing practices can be made more efficient, more equitable and, most importantly, updated, to ensure streaming and other online music services deliver in full on their potential."

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