Stream Fair: The Law Ensuring Musicians' Living Wages on Spotify & Beyond
A new law attempts to put more money in musicians' pockets. Andrew and Craig are for that, but can it work?
This week, Andrew and I discussed a new proposed law that creates a fund to pay artists more money. It’s a good idea, but could it work?
We try and discuss it all.
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The proposed "Living Wage for Musicians Act of 2024" introduces a novel framework aimed at ensuring that musicians receive fair compensation for their creations, specifically in the context of the digital age and streaming services. Here's a detailed summary of the major points, including the funding mechanisms, timing, and any mentions of specific streaming services.
Establishment of the Artist Compensation Royalty Fund
The bill proposes the creation of the Artist Compensation Royalty Fund, which is to be administered by a designated eligible entity. This entity will be responsible for the fund's oversight, ensuring that the objectives of the act are met efficiently and transparently. The Librarian of Congress, with the Register's approval, is tasked with designating this entity.
Funding Mechanisms
The funding for the Artist Compensation Royalty Fund is envisioned to come from two primary sources: a "living wage royalty fee" and a portion of non-subscription revenue generated by service providers. Specifically, the service providers are required to deposit into the fund both the living wage royalty fees collected and 10 percent of their non-subscription revenue. Additionally, the fund may receive contributions from various sources, including federal, state, or local governments, highlighting a multi-faceted approach to gathering the necessary financial support for artists.
Allocation and Distribution
The collected funds are allocated with a 90-10 split between eligible featured artists and eligible non-featured artists, respectively. Payments from the fund are scheduled on a quarterly basis, ensuring regular compensation for the artists. This structure aims to provide a steady income stream for musicians, addressing the financial unpredictability many face in the current digital music landscape.
Service Provider Obligations
Service providers, including streaming services, are mandated to collect a living wage royalty fee from subscribers, set at an additional amount of 50 percent of the subscription fee, subject to a minimum of $4 and a maximum of $10. This approach directly involves streaming services in the financial support structure for artists, recognizing their role in the modern music consumption ecosystem. The act explicitly requires transparency from service providers regarding this additional fee, ensuring subscribers are aware of its purpose and contribution to artists' welfare.
Enforcement and Compliance
The Act empowers the Fund Administrator to establish penalties for service providers that violate the act's provisions or fail to comply with its requirements. This enforcement mechanism is crucial for ensuring adherence to the act's objectives and the reliability of the funding model for musicians' compensation.
No Specific Streaming Services Named
The act does not single out specific streaming services by name, instead referring broadly to "service providers." This inclusive terminology ensures that all platforms contributing to music streaming are encompassed within the act's scope, promoting a fair and universal application of its provisions.
This legislative proposal represents a significant step toward modernizing compensation for musicians in the streaming era, acknowledging the challenges artists face in securing a livable income from their work. By establishing a structured fund, enforcing service provider contributions, and ensuring regular payments to artists, the "Living Wage for Musicians Act of 2024" aims to create a more equitable and sustainable music industry for all involved.