LONDON – Digital music services like Spotify, Deezer and Apple Music are being called upon to make faster royalty payments and hand over a higher percentage of revenues to artists and rightsholders to help them survive the coronavirus crisis.
The recommendation is one of 10 proposals made by European indie labels trade body IMPALA in its COVID-19 Crisis Plan.
Other recommendations include increased promotion of local music by European radio stations and the establishment of emergency funds by collecting societies (where they don’t already exist), making advances available for all members, as well as interest free loans.
At the heart of the plan is a call for an urgent and co-ordinated response across Europe to minimize the impact of the pandemic on the independent music sector, which has been particularly hit hard by the global crisis.
To support the thousands of micro-businesses and self-employed workers most affected IMPALA wants to see all countries take clear decisions on event cancellations and lockdowns to ensure people can claim on their insurance and access compensation schemes.
In some European touring markets this has already happened, but others have suffered from unclear messaging from national governments. In the United Kingdom, there was a five day lag between Prime Minister Boris Johnson advising people not to go to pubs, clubs and music venues and him officially ordering them to close. The week-long delay meant many U.K. venues were forced to stay open with no customers, yet unable to claim on their business interruption insurance.
IMPALA’s crisis plan also recommends comprehensive economic measures for all European countries, including increased EU funding, unemployment relief for self-employed workers, fiscal incentives to boost recovery and the suspension of VAT (value-added tax, also known as goods and services tax) on all cultural goods and services, like music.
As well as making faster royalty payments and increasing payments to artists and labels, digital music services are being urged to provide advances to all rightsholders who need them and increase their support of local music through dedicated playlists.
The roll-out of IMPALA’s plan, which can be seen in full here, will be accompanied by a survey of its 5,000 members measuring losses and promoting best practice.
According to IMPALA, 99% of Europe’s music companies are micro, small or medium-sized independent enterprises and self-releasing artists. Collectively they produce more than 80% of all new releases and account for 80% of the sector’s jobs.
“This is a call for urgent action,” IMPALA executive chair Helen Smith tells Billboard. “Small and emerging companies in countries like Italy are saying they are on their knees, being much further into the crisis than other markets.”
She likens the coronavirus crisis to an iceberg, where the most visible consequences like cancelled tours and festivals have profound knock-on effects that are not immediately apparent.
“A cancelled tour will have ongoing damage as release schedules are mostly on hold till later in the year [creating] a saturated market,” says Smith. “In the meantime, income for labels is down as it’s linked to new releases… Add the problem of what is happening with traditional retail and also online retail of physical product, which has plummeted, and the decline in digital streams and advertising revenue and it gets tough. Meanwhile the bills continue to come in.”
“Most small companies can’t survive that for any length of time,” she says. “If that happens, fewer artists will have partners to work with, particularly independent and local.”
