The future of created song in the context of new technology.

ABSTRACT

This essay explores the difficulties faced by independent creative music artists in receiving fair financial reward from digital music streaming providers. Music streaming has created an environment in which reward for the creative work of an artist is negligible, making song financially valueless to the artists who create it. International law has instruments available to it to regulate music streaming revenue allocation; redress the economic bias; and fulfil the human rights declarations contained within treaties and conventions that protect the rights of creative artists. Yet member states have failed to respond adequately to the treaties’ directives or fulfil these legislative obligations within their own jurisdictions.

Deeper exploration reveals new forces and non-traditional actors with unpredictable agendas working toward the creation of a music streaming world that challenges the legislative instruments of international state jurisdictions. Music streaming offers listeners convenient and relatively free access to music, a phenomenon never faced by the regulators of music before. As a consequence, the public has ceased to apply monetary value to individually streamed songs. A small subscription is paid for songs the majority of which subscribers will never hear or choose to hear. Over 90% of songs that are placed on streaming platforms are never heard. Why? It is physically impossible, with 100,000 songs saturating streaming platforms every day. Additionally algorithms only allow the listener to hear what the platform has decided it wants the listener to hear. This is the power of collected data. When used by an intelligent machine, with music as its emotional and psychological tool, streaming providers powerfully manipulate the mood of the listener.

With music and data in the hands of a master of surveillance capitalism, it may be possible to run the world. In this scenario the work of the independent creative artist becomes an insignificant byte in the digital ocean that now threateningly circumnavigates the world.

What began as a foray into the role international law must play in regulating the plight of the independent musical artist, has unearthed a question over the future of human created song and the adequacy of international law to save it.

INTRODUCTION

States traditionally have possessed full legal capacity in the context of international law. However, over the last one hundred years international organisations, corporations and individual people have acquired a limited legal capacity and also retain rights and obligations within the context of international law. Capitalist corporations and their CEOs manage global markets. Military forces unravel economic, ethnic and geopolitical entanglements, for better or for worse. International law through the auspices of its state obligations, regulates for the good of vast geographical areas of the world, and for the safety of its populations.

The digital streaming of music has expanded quickly throughout the world with the growth of digital streaming providers (DSP’s). Spotify, the most significant of the DSPs has acquired 626 million users, including 246 million subscribers in 184 markets (countries). Total revenue for the second quarter of 2024 is $A6.1 billion. Other DSP’s such as - YouTube, Pandora, Google, Deezer, Amazon, Apple Music, Tidal, Rhapsody and Xbox use similar business models and technology, with only slight variation. Combined with well-established Warners, Universal and Sony, the world’s ‘Big Three’ music companies, they form a Music Industrial Complex (MIC).

Transformative technologies such as music streaming may seem innocuous in the context of international law. However, other transnational technological organisations such as Google, Microsoft, Amazon, Apple, X, TikTok and Meta with whom the MIC must collude to survive, are an evolving and insidious influence on the world’s population. These organisations hold overwhelming economic, emotional, psychological, social and security access to nearly every individual on the planet. Bremmer begs the question ‘who now runs the world?’ He goes on to introduce the concept of a ‘technopolar world’- ‘where technology companies wield unprecedented influence on the global stage, where sovereignty and influence is determined not by physical territory or military might, but control over data, servers, and, crucially, algorithms.’

To go one step further, the controllers of the ‘technopolars’ - Google, Apple, X, Facebook, YouTube and Spotify and the MIC, have been commodifying people’s personal data; throwing a veil of secrecy over how it is used, and by doing so protecting technopolar organisations from scrutiny, criticism and analysis, akin to the haze around the smoking industry complex.

The 626 million Spotify users and subscribers can be defined as commodified data. Their subjective activities, communication and interactions are mediated by the world’s most valuable music technopolar corporation, Spotify, through data surveillance consumerism. The personal preferences, habits, location, and online behaviour of the unsuspecting music listener is harvested via algorithmic targeting, and attention economy. The data are exchanged for profit within a conceived economic environment known as surveillance capitalism which for the majority of people is invisible. Spotify explains that the data is used to improve user experiences, target audiences with ads, and make overall better informed business decisions. These decisions have resulted in an October 2024 market capitalisation of $US109.7 billion.

Given these extraordinary numbers it is important to understand just how unregulated the power and influence of digital technology has become. Zuboff decries that ‘surveillance capitalism challenges democratic norms and departs in key ways from the centuries-long evolution of market capitalism.’ The diminishing capacity of international law through member states to regulate and legislate, or even comprehend the nature of this challenge further prompts the question - who now runs the world?

THE MIC AND THE INDEPENDENT CREATIVE ARTIST

The independent creative artist is responsible for providing the critical assets (musical creative content) that drive Spotify’s growth and wealth acquisition and provides the value that attracts users, subscribers and advertisers. Music streaming and the MIC are embedded in Bremmer’s digital technopolar world, and it is the complex power and these non-traditional actors that international law must contest if the rights of individual creative artists are to be protected and their work equitably remunerated. The shadow of the larger issue of the negative effect of data collection and the commodification of our humanity, shines as a beacon of what may lie ahead.

The work of the independent creative artist - song writer, performer, musician - has been significantly diminished in this current environment. The MIC does not acknowledge the artist’s value differentiation and excludes the artist from proportionate revenue sharing calculations. Instead of receiving equitable financial reward for their work, the creative artist is sequestered into a digital listening environment where success is based on a currency of ‘streams’ with as little as $US0.004 per stream in return.

Identifying the specific obstacle preventing the independent creative artist from receiving equitable remuneration from streamed music is difficult if not impossible. The MIC has elicited a reticence from states’ legislatures to fulfil the copyright directives of international treaties. These rights are explicitly stated, and the artist continues to be marginalised financially. Unregulated, the MIC accounts for ‘74.1% of all digital music globally.’ Customers pay DSP’s over $US12 billion per year. DSP’s pay rightsholders (the Big Three) over $US9 billion per year. Yet the amount rightsholders pay musicians is unknown. Vast amounts of revenue seemingly disappear.

BACKGROUND TO INTERNATIONAL LAW AND COPYRIGHT

The physical delivery of music as a product – records, CD’s, Mp3 files – is now nearly non-existent. Instead, music is made available to the public as a subscription service that provides access to vast archives of content. The transformation in the delivery of music has been rapid, causing a delay in the regulation of the music streaming service, due in part to international law not keeping pace with the technological evolution of digital streaming.

Old technology - Vinyl 45's

Global copyright laws are overseen by the Berne Convention for the Protection of Literary and Artistic Works (Berne Convention). Article 9(1) of the Berne Convention gives a creative artist the authority to allow the ‘reproduction of their work in any manner or form.’ This copyright authority is the centrepiece of the music industry. It allows exclusive control by others of a creative artists work.

Music rights are made up of three elements - reproduction, distribution, and public performance. Specifically the copyright of a song is made up of the lyrics and the notation of music – ‘the musical work’. This is legally separate from the copyright of the song’s audio performance recording – ‘the sound recording’. Typically record labels will ask for, or ‘licence’ the reproduction, distribution and public performance rights. The right of a song’s ‘musical work’ and ‘sound recording’ right are divided between a publisher and a performing right organisation. In this complex scenario it is possible to hear the argument echoing down through history, going back to even before the invention of the phonogram. It is a history of unfairly compensated artists ‘that has been raised time and time again, over decades and across genres.’ The record label, publisher and performance rights organisations are now all mutually owned by the Big Three, creating vertically integrated control over royalties to further disadvantage the creative artist.

The Universal Declaration of Human Rights states, ‘[E]everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he or she is the author.’ In 2021, the World Intellectual Property Organisation (WIPO), confirmed that artists were ‘grossly undercompensated by streaming services and unduly harmed by their expansion’. Yet copyright confusion prevails. Spotify refuses to acknowledge streaming as a ‘reproduction’ as provided by section 106(1) of the 1976 US Copyright Act, and argues it is not obligated to pay the artist equitably for their work. After negotiations between the WCT and WPPT, an agreed consensus on a work’s ‘reproduction’ right remains unclarified. The treaty provisions therefore permit Spotify to need only purchase one copy of a song and then infinitely reproduce it digitally via streaming to the public, further financially marginalising the artist.

Additionally, Spotify ‘makes available’ music to the public which also implicates copyright law under the WIPO Internet Treaties. This ‘making available’ right should override the reproduction right in the context of streaming. However, the applicable treaties based on the outmoded radio model still do not account for digital streaming. The MIC believes that streaming should not attract equitable remuneration in the same way as traditional broadcasting does for which they believe the legislation was designed. The MIC remains wedded to the physical analogue radio business model when it comes to remuneration. The old licensing and royalty systems and 50-year-old agreements are still used to dispose of artists rights. Radio has a publishing right component that attracts fair remuneration. In contrast, streaming to the advantage of the MIC, is not published work but a ‘mechanical’ with streaming service fees going directly to the copyright owner, one of the Big Three, who is seldom contractually bound to pay viable fees for this new technology. The average percentage royalty the artist receives is approximately 21%. The label receives 79%.

INTERNATIONAL LAW DIRECTIVES

The United Nations’ report on streaming states ‘that current streaming economics are destroying music worldwide, and points to the need for a new royalty system to pay artists more fairly’. Yet few States have been able to fulfil the directives and recommendations of the UN or the European Union.

The European Union passed the Digital Single Market Directive in 2019 encouraging member States to allow ‘unwaivable rights and equitable remuneration.’ Articles 18 to 23 of the directive have been transposed by 16 out of 19 member states as of 2024. Yet legislation has only been implemented in Spain, Belgium and Uruguay even though they are obliged to do so. The 2024 legislation in Uruguay provides the ‘right to a fair and equitable remuneration’ for all ‘agreements entered into by authors, composers, performers…’. Spotify contested the Uruguay legislation threatening to withdraw. Once the legislation was clarified Spotify retained its services in Uruguay.

In October 2020, the UK House of Commons’ Digital, Culture, Media and Sport Committee Report (The Report) called for a change in the way the music industry was structured. The Report committee criticised the UK government for not implementing the copyright standards of the EU Digital Single Market (DSM) directive on equitable remuneration. It also indicted the MIC for its unnecessary lack of transparency.

The Copyright (Rights and Remuneration of Musicians, Etc) Bill (The Brennan Bill) was introduced to give effect to The Report. The bill was savaged by the MIC, calling it misguided and accusing it of potentially stifling investment. The European music writers association - the Ivors Academy, contested the MIC’s response extolling the bill’s attempts to redress the imbalance. This contestation has been the pattern around the world.

INTERNATIONAL LAW AND TRANSPARENCY

It is difficult for the organs of state to run inquiries when the collusion between actors within the MIC hold onto an abundance of power and control because of a lack of transparency due to non-disclosure agreements (NDA’s). Central to the conundrum facing international legislators as they try to unravel the music streaming revenue is where the disappearing revenues are allocated. 10% of artists account for 99.4% of streams. The MIC control the top 10% of the artists and administer the publishing rights to over 10 million songs. Crucial components of agreements and contracts including - rates and significantly noncash payments and benefits - are hidden from the public, artists, and state legislators who are left to regulate in the dark. Secrecy has been cited as the major obstruction in the reform process. International legislators, struggle amidst the self-reporting from the MIC and resort to reverse engineering data from public sources in their attempts to find the facts.

The issue of transparency returns us to Bremmer’s technopolar world, and an embrace of Zuboff’s ‘methodologies of secrecy that aim to prevent interruption of critical supply chain operations that begin with the rendition of human experience and end with the delivery of behavioural data to machine intelligence-based production systems.’ Zuboff’s pith is the perfect extrapolation of how Spotify and the MIC turn the artist’s creative work into a consumeristic experience. An experience that captures the behavioural information necessary to exploit the underlying business of the technopolar corporation – the sale of data for the commodification of human behaviour.

CONCLUSION

Studies on this subject vary slightly, but most conclude that digital technology is not overseen by either real competition or regulation. Khan suggests that technological companies ‘operate a platform and market their own goods and services on it’. This means they compete with businesses that depend on them, thus creating conflicts of interest that place platforms like the MIC in positions of astounding power.

What began as an investigation into the inequitable financial rewards received by independent creative artists from DSPs has clambered into the rabbit hole of the future where we cannot see the bottom. That presumes that the future is at the bottom of a hole, a black hole. If the veil thrown over music streaming by the MIC is meant to enliven an artistic rendering of human experience and to deliver a human music response experience as data via algorithmic targeting, then the future of the human creative artist is writ large. In that future music will be generated artificially. It will determine commodified emotional and

psychological responses that will be sold as data to advertising and all its ancillary components.

Busking - the last refuge for the independent creative artist.

Concern for equitable remuneration for the creative artist becomes academic in this scenario. If international law fails to regulate the technopolar world, the music streaming machine will destine the economic viability of the artist to disintegration and their human creativity valueless. Inevitably the creative artist will be assigned to busking on street corners as a reminder of what once was.

BIBLIOGRAPHY

A. Articles/Books/Reports

Aoun, N et al, 'Discover Weekly: How the Music Platform Spotify Collects and Uses Your Data' (Montreal AI Ethics Institute) https://montrealethics.ai/discover-weekly-how-the-music-platform-spotify-collects-and-uses-your-data/

Birchall, Clare, ‘Managing Secrecy’ (2016) 10 International Journal of Communication 152–163

Carpentier, Chantal Line, ‘New Economics for Sustainable Development’ (United Nations Economic Network) https://www.un.org/sites/un2.un.org/files/attention_economy_feb.pdf

Castle, Chris, 'Riding the Third Rails: Making the case at WIPO for performer streaming remuneration' (2021) Music Technology Policy https://musictechpolicy.com/2021/06/19/riding-the-third-rails-making-the-case-at-wipo-for-performer-streaming-remuneration/

Choy, Annalisa, 'Music You Love: Harmonizing Music Streaming and International Copyright Law' (2018) 7 Cornell International Law Journal https://cornellilj.org/2018/04/27/music-you-love-harmonizing-music-streaming-and-international-copyright-law/

Clark, Dr Birgit and Courtney Whitford, 'The Emperor’s Nifty New Clothes? Some Thoughts on “Non-Fungible Tokens” and IP Law' (2021) Australian Intellectual Property Law Bulletin

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Dredge, Stuart, ‘Spotify to Stay Live in Uruguay After Government “Clarification”’ Music Ally (13 December 2023) https://musically.com/2023/12/13/spotify-to-stay-live-in-uruguay-after-government-clarification/

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Ingham, Tim, 'The three major music publishers now own or control over 10 million songs between them (kind of)' Music Business Worldwide (20 October 2022)

https://www.musicbusinessworldwide.com/the-three-major-music-publishers-now-own-or-control-over-10-million-songs-between-them-kind-of/

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Peoples, Glenn, 'Fare Play: Could SoundCloud’s User-Centric Streaming Payouts Catch On?' (12 March 2021) Billboard https://www.billboard.com/index.php/articles/business/streaming/9539421/use-centric-streaming-soundcloud-explainer-analysis

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Wixen Music Publishing, Inc v Spotify USA Inc (C.D. Cal, 2018) https://www.theverge.com/2018/12/20/18150197/spotify-wixen-lawsuit-settlement-dismissal-music-publishing

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Copyright Royalty Board (USA), 17 USC ss 801–805 (2004) https://app.crb.gov/

Copyright Act 1968 (Cth)

Digital Millennium Copyright Act of 1998, Pub L No 105-304, 112 Stat 2860 (1998) (United States)

Rendición de Cuentas (Uruguay, 2023) art 285

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International Labour Organization (ILO), Convention No 105 concerning the Abolition of Forced Labour, 320 UNTS 291 (entered into force 17 January 1959)

International Labour Organization (ILO), Convention No 29 concerning Forced or Compulsory Labour, 39 UNTS 55 (entered into force 1 May 1932)

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World Intellectual Property Organization (WIPO) Performances and Phonograms Treaty, opened for signature 20 December 1996, 2186 UNTS 203 (entered into force 20 May 2002)

WIPO Performances and Phonograms Treaty, opened for signature 20 December 1996, 2186 UNTS 203 (entered into force 20 May 2002)

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'

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Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on Copyright and Related Rights in the Digital Single Market [2019] OJ L 130/92

House of Commons, Digital, Culture, Media and Sport Committee, Economics of Music Streaming: Second Report of Session 2021–22 (2022) https://www.parliament.uk/business/committees/committees-a-z/commons-select/digital-culture-media-and-sport-committee/inquiries/parliament-2019/economics-of-music-streaming-2021-22/

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'The Broken Record Campaign' (UK) (2021) Mixmag https://mixmag.net/feature/brokenrecord-music-industry-streaming-labels-artists-exploitation-equitable-renumeration

UK Parliament’s Digital, Culture, Media and Sport (DCMS) Committee, Economics of Music Streaming Report (2021) https://ukparliament.shorthandstories.com/music-streaming-must-modernise-DCMS report/index.html utm_source=committees.parliament.uk&utm_medium=referrals&utm_campaign=economics-music-streaming&utm_content=organic

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