A report by the Digital, Culture, Media and Sport (DCMS) committee said a complete reset of the market is required with artists splitting royalties on a 50/50 basis with music companies, rather than getting around 16% as they do now.
“Only a complete reset of streaming that enshrines in law their rights to a fair share of the earnings will do,” said Julian Knight, chair of the DCMS committee.
Hipgnosis welcomed the report, with founder and chief executive Merck Mercuriadis saying it had got to the nub of the issue,
“This is an impressive report from the DCMS Committee.
“In a short space of time, our members of parliament have been able to distil why the songwriter and artist are not being remunerated properly with some accuracy and we both applaud and support their efforts.”
Mercuriadis added it is essential that the “unhealthy control that the major recorded music companies have over streaming negotiations is addressed and to expose the fundamental flaws that exist within the music industry”.
He wants a full Competition Authority inquiry into the streaming industry to show the economic consequences of this dominance.
Paul McCartney, Kate Bush and Jessie Ware are also among hundreds of musicians who have written to the Prime Minister calling for changes.
The committee suggested it would be a straightforward change to bring streaming in line with radio where the income split is half and half.
Record labels, though, said it was not a fair comparison.
“Streaming is 24-7 in every country in the world, you can listen to the greatest record store ever – it’s clearly a sale, it’s not radio, it’s on-demand,” said David Joseph, CEO of Universal Music UK told the committee.
Music industry trade body the BPI added that streaming was “enabling more artists than ever” to earn a “long-term, sustainable income” and expressed concern about possible changes on new talent.
According to the BBC, Spotify is believed to pay between GBP0.002 and GBP0.0038 per stream, while Apple Music pays about GBP0.0059 and YouTube about GBP0.00052 (or 0.05 pence) per stream.
This income goes to rights-holders who are everyone involved from record companies to artists with the money divided up between them, but not equally claim the artists.