The European Parliament took a significant step this month to bring about potentially transformative changes within the music streaming industry. Members of the European Parliament (MEPs) voted with a resounding majority of 532 votes in favour and 61 against (with 33 abstentions) in favour of a resolution calling for new EU rules to “ensure a fair, inclusive and sustainable ecosystem”.

A revenue distribution model perceived as resulting in unjust compensation for smaller, growing artists.

MEPs have called upon major music streaming platforms to rectify the "imbalance in revenue allocation" and ensure just remuneration for artists. The resolution emphasised the absence of existing EU regulations overseeing music streaming platforms, despite their widespread use as the primary method of music consumption. MEPs advocated for the re-evaluation of outdated "pre-digital" royalty rates, urging the industry to explore fairer models of streaming revenue allocation, such as pro-rata and user-centric approaches.

A perceived lack of cultural diversity and a need for better promotion of “local” performers in the music streaming industry (particularly music not in the English language).

The proposal seeks to enhance the visibility and accessibility of European musical works in particular, while also addressing the overwhelming volume of content added to streaming services. MEPs have suggested there should be greater focus on independent artists from a larger pool of genres and languages in order to promote diversity. European Parliament member, Ibán García del Blanco, stressed the importance of amplifying the concerns of European creators, prioritising cultural diversity and equitable compensation for authors:

“The Parliament is giving voice to the concerns of European creators, who are at the heart of the music streaming market. Cultural diversity and ensuring that authors are credited and fairly paid has always been our priority; this is why we ask for rules that ensure algorithms and recommendation tools used by music streaming services are transparent as well as in their use of AI tools, placing European authors at the centre”.

Fraudulent activities on streaming platforms diverting royalties from genuine players.

The European Parliament additionally called for transparency in streaming platforms' algorithms and recommendation tools to curb unfair practices like the manipulation of streaming figures and streaming fraud (for example, when bad actors use bots or other means to artificially inflate the number of streams for particular tracks). The industry will, no doubt, welcome moves from the European Parliament to tackle this sort of fraudulent behaviour on streaming sites. 

The impact of AI-generated content on the revenues and discoverability opportunities for human artists.

Building on the EU's Artificial Intelligence Act, MEPs proposed the introduction of a label to identify songs generated by AI. The resolution also advocates for measures to combat the use of AI “deepfakes” that feature an artist’s likeness without permission. It calls for deployment of ‘identification tools’ to detect these deepfakes.

Where next?

This resolution does not immediately result in legislation, but this vote is an interesting step toward initiating potentially widespread changes for music streaming within the EU.

This resolution comes against the background of similar concerns in the UK, and the Intellectual Property Office has recently published a Voluntary Code of Good Practice on Transparency in Music Streaming. It follows the recommendations of the Culture, Media and Sport Select Committee’s Inquiry into Music Streaming. It sets out agreed standards of good practice, forming part of a shared ambition across the music industry to build greater trust in music-maker contracts, streaming licensing deals, royalty payments, usage data, audit rights, and communication to music creators.