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. GOV'T GETS A LESSON IN STREAMING

SpotifyApple Music and Amazon got technical in discussing streaming’s sale-vs.-rental debate and alternative remuneration models at the U.K. government’s ongoing inquiry into the economics of streaming.

Tuesday’s session heard from Spotify Head of Global Affairs and Chief Legal Officer Horacio Gutierrez, Apple Music Global Senior Director of Music Publishing Elena Segal and Amazon Music Director of International Paul Firth

Whether a stream is a sale or a rental has been a hotly contested issue in previous sessions and yesterday’s interviewees were posed the question. According to music:ally, Gutierrez said, “Renting has certain economic and legal connotations that I think are not 100% applicable to our scenario.” Segal allowed that she sees streaming as a license: “We have a right; we have licenses that entitle us to sub-license to consumers and that’s always been true with music.” Firth believes streaming is neither, explaining, “Streaming is something different, and trying to qualify it as something from the old world… It’s a classic square peg/round hole moment.”

When discussing the idea of changing the economic model of streaming to a user-centric payout system, Gutierrez said Spotify would “definitely be open to looking for alternative models and considering them.” Firth commented that Amazon would be “very keen” to explore new payout models, whether user-centric or otherwise, while Segal said alternative ideas are “very interesting” but would require a “consensus among all licensors.”

Other topics covered included the idea that passive streams could be remunerated the same way as broadcast radio (in the U.K., recording royalties are split 50/50 between labels and artists.) Segal thinks it’s possible, though Gutierrez reckons it could be difficult distinguishing between passive and non-passive streams, noting, “Increasingly, there isn’t going to be just a single radio-style linear presentation of music."

Firth said that streaming is “much more interactive than radio” due to data about what’s being served to listeners and the ability to skip, pause and rewind tracks. Ultimately, the three execs agreed to engage in talks on the equitable distribution of revenues in the industry. 

Finally, on the subject of whether streaming subscriptions should be increased, Gutierrez said, “Over time, the menu of options available to users is going to be more robust,” which will include higher-price tiers or offerings. Segal pointed out that the services are “competing with free” which makes it hard to “put prices up in a vacuum by yourself.”

She continued on this note when asked about YouTube, adding: “The fact is that they don’t necessarily have licenses for all of the music they use, and they don’t need to. And even if they do have licenses, the amount they pay because of the way their business model is set up, and the way the tariffs work, is less.” 

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