What Legal Problems Arose with Music Streaming

In the nearly 24 months between Napster`s cancellation and the iTunes Music Store`s announcement to the public, the music industry attempted to create legal replacements, but the lack of precedent was a problem. No one could understand exactly what a legal digital music industry should look like or how it should operate. Example: Last week, Universal Music Group CEO Sir Lucian Graenge promised to give his company`s artists “answers” to a 2008 fire that set fire to a number of original master tapes – although (a) he wasn`t even CEO when the fire occurred; b) No one really noticed that any of the masters had disappeared until the New York Times wrote about it this month; and (c) the fire apparently has no effect on Universal`s own valuation and, therefore, on its shareholders. Today, as the pandemic threatens the live music industry, the way forward should include a reorientation of initiatives towards ownership of streaming rights and the introduction of a mandatory copyright certificate for all musical compositions and copyright for music in general. In one corner were Universal Music and Sony Music, both of which supported PressPlay, created using DRM technology from Microsoft`s Windows Media Player. In the other, MusicNet, which had three labels at stake – Warner Bros., Bertelsmann Music Group (BMG) and EMI – and the backing of RealNetworks, whose streaming technology defined the early days of the Internet. In the DCMS report, UK MPs noted that even the biggest international artists are seeing “pitiful returns” from streaming. To put things in perspective, recent statistics show that of the estimated £736.5 million that UK music labels earn each year from streaming, artists only make around 15% of the profits from their streaming music. Some may be shocked at how little some of our favorite artists do, no matter how catchy their single is – see for yourself! LexisNexis® and Bloomberg Law are external online distributors of ALM`s extensive collection of current and archived versions of legal news publications. LexisNexis® and Bloomberg Law clients may access and use ALM content, including content from the National Law Journal, The American Lawyer, Legaltech News, New York Law Journal and Corporate Counsel, as well as other sources of legal information. The music industry tried to find a replacement for Napster in the market, just as they made heavily armed gold records with artists who had one single and nine demos.

And they were convinced that the strategy would work without any problems. Instead of complaining and whining – which I could do all day, given that streaming scams literally rip off artists who deserve to earn more on these platforms – it might be more useful to look at what was actually missing in the code; The proposals he could have included would have really changed the problem substantially. (And make no mistake, this is a very serious problem: Stream fraud could take $300 million a year from the pockets of deserving artists and labels, according to recent estimates from music insiders.) We must first look at some of the arguments put forward by those who are in favor of legal reform of the music streaming industry (this corner has everyone from Sir Paul McCartney to Stevie Nicks, Sting to Radiohead and KSI to Abba) and those who oppose it (Sony, Warner, Universal Music, Spotify, YouTube, to name a few). Sony Music Entertainment prohibits the manipulation of streams by its employees or third parties acting on behalf of the company. This includes the use of third parties and companies that engage in flow manipulation practices, including offering such services for a fee. Sony Music Entertainment employees shall not engage in stream manipulation and shall not facilitate, facilitate or promote, directly or indirectly, the manipulation of streams by third parties, including recording artists and/or their agents. This prohibition also applies to the manipulation of other measures on streaming services (e.g. number of subscribers/subscribers and republication of music recordings) that record incorrect medium for recordings or artists. “It`s a blatant shame that the gap between Microsoft and RealNetworks has extended to the big labels,” Aram Sinnreich, an analyst at Jupiter Media Metrix, told CNET in 2002.

“The bottom line is that it will take longer for consumers to access a music subscription service that gives them enough music.” If a significant and complete restart of the music streaming industry is to take place, as the UK government recommends, a two-tier system of regulatory reform appears to be the industry, backed by legislative development that balances the intellectual property rights of music labels with mere equality for the artists who produce their works. In addition, it would limit the power of the major international record companies and thus deal with competition law issues. Just before streaming music took the world by storm, the music industry had always benefited from the sale of physically distributed music like cassettes, CDs, and LPs. Soon after the advent of digital music, there were major concerns about unlicensed streaming, unauthorized access, and stream ripping entities. As music piracy and intellectual property infringements began to cost the industry billions of dollars, regulations emerged in the form of mechanical licensing. Under the 1996 WIPO Internet Treaty, digital music services were granted the right to exploit and extend their offering to consumers beyond their national territory and to expand globally. After twenty years of illegal downloads and music piracy (who remembers Limewire?), opponents claim that streaming saved the music market from MP3 pirates and another decade from copyright criminals. Legislative intervention can affect the competitiveness of the UK music industry, stifle any possible development and threaten the rights of copyright holders. The explosion of the music streaming industry itself could be cited as the only reason for a rejuvenation of the current copyright regulations for streaming and music royalties. Currently, streaming royalties are paid to the intellectual property rights holder – this is usually the all-powerful record company. For more information on royalties in the music industry, see the infographic below.

The result of this conflict for the digital music industry was that the services were not compatible, thus limiting the amount of music that was on each service – some major labels on the one hand, other major labels on the other. In the end, neither of the two departments of each of the major labels had done so. The conflict between the two tech giants led to the services they sold to the music industry. Such reform was mentioned in a letter to Boris Johnston of Desert Island Discs in June 2021. It has been suggested that only two words of the Copyright, Designs and Patents Act (CDPA) of 1988 could be amended to allow streaming platforms to pay artists the same remuneration and royalties as radio stations – although they do not specify what those two words are. Regulatory reform will hurt investment in new music. Primitive Radio Gods was far from the only band currently based on the kind of music industry miscalculation that famed producer Steve Albini, best known for his work with Nirvana, could see a dozen miles away, but their trajectory highlights almost all of their drawbacks. The band didn`t even get the chance to release a legitimate album on a major label because their label was shut down! This quote is not from a particular friend of music. It comes from Margaret Thatcher – the market-loving British Prime Minister (1979-1990) who approved some of the toughest cuts in arts funding Britain has ever seen. Nevertheless, the point remains. And if you needed more evidence to back it up, the modern music industry has just made it available in abundance.

A “user-centric” system means that artists/rights holders receive only a percentage of what each subscriber plays each month; He was the son of the Duke of Nassau. If they play nothing but their own music after paying their $9.99, they can only get back their $9.99 (minus Spotify`s operating and profit costs). The pandemic arguably only reinforces the argument that copyright should be updated when it comes to streaming royalties, as we have seen the negative impact that the loss of live performances has had on the livelihoods of many artists, who have therefore been forced to rely more than ever on their small share of streaming revenues. Stephen Thomas Erlewine, review of Allmusic, described the album as follows: “At its core, Rocket sounds like a demo tape with a promising song. In short, fake streams cover all cases — whether for money or for industry/chart advantage — where one party pays another party to collect illegitimate streams of an artist`s music.