Stronger artists’ rights or red tape for streaming services? – European Parliament proposes stricter regulation of music streaming services

Streaming services have long since dominated the music industry, now accounting for around two-thirds of its global revenue. Streaming continues to be popular with users, but the business model has its critics among artists, particularly when it comes to remuneration and discoverability of content.

This criticism has now motivated a majority in the European Parliament to take up the cause. In a resolution dated 17 January 2024 on “cultural diversity and the conditions for authors in the European music streaming market (2023/2054(INI))” it has proposed fundamental regulation of the streaming sector to benefit musicians in Europe. The calls for action are addressed to the EU Commission, the only governing body granted authority under the European treaties to introduce legislative initiatives.

Key aspects of the resolution

Sustainable ecosystem for authors

The European Parliament promotes its vision of greater visibility on the music streaming services and a more balanced distribution of streaming revenues. In particular, it calls on the Commission to revamp “predigital” remuneration systems and criticises so-called “payola schemes” that force authors to accept lower or no revenue in exchange for greater visibility. It also advocates improving creators’ position using metadata to better identify those involved in the creative process.

Ethical use of AI

Another important topic of the resolution is how artificial intelligence (AI) is used in the music industry. Here, the European Parliament emphasises the need for legal targeted provisions to ensure the transparency of the algorithms and content recommendation systems. It states that ethical use of AI also includes making the public aware of whether music has been generated mainly by AI. It also advocates setting up reporting mechanisms for deepfakes, meaning AI-generated content that may use authors’ and performers’ identities, voices and likenesses without their consent, and other manipulated content.

Promoting Europe’s diverse music culture

The European Parliament also proposes promoting Europe’s diverse music culture. It believes that European musical works should be more visible and even prominent. It suggests even considering quotas for European musical works.

Assessment and outlook

Naturally, the resolution does not yet contain any concrete draft legislation, but rather restricts itself to basic principles and structural suggestions. However, it reveals the clear intention to subject the European streaming market to more comprehensive regulation. It is not currently foreseeable when a bill from the EU Commission can be expected or whether it will include the Parliament’s proposals.

The European Parliament’s initiative entails the risk of deeply curtailing streaming services’ commercial freedom, particularly as regards potential regulation of remuneration structures. The resolution does state that a new distribution model for authors should be developed based on structured dialogue among all stakeholders. Nevertheless, legal requirements from Brussels are on the horizon. Obligations to disclose the algorithms being used and priority discoverability of European works would also have considerable consequences. The highest priority therefore is to maintain consistency with other AI legislation.