The European Parliament proposed an overhaul of how music streaming services pay artists

Nearly every music streaming service – Spotify, Apple Music, etc. – currently uses a royalty model that compensates artists per listen

On average, artists receive $.005 per listen

That means the world’s largest artists – who get hundreds of millions of listens annually – make fortunes off their royalties, while smaller artists often don’t make enough to support themselves

For years, scrutiny over how streaming services compensate artists has pressured several to overhaul their royalty models

Last year, Deezer – France’s largest streaming service – struck a deal to overhaul its royalty system by defunding “non-artist noise content” – i.e., AI-generated or otherwise non-original music – and boosting royalties for artists who receive 1,000+ monthly listens from 500+ users

Spotify has suggested it may implement similar changes, including features to crack down on AI

On Wednesday, the EU Parliament, the EU’s legislative body, voted 532-61 to propose a massive overhaul of streaming services’ royalty models

The proposal states that current royalty models must be brought in line with “modern rates”

It also calls on streaming services to adopt “fairer models of streaming revenue allocation”

Those measures are intended to ensure that smaller artists can earn a living off their music

Among other things, the proposal also suggests creating a quota system to ensure that European artists are being featured and promoted on major streaming platforms

The proposal would also require streaming services to identify and label AI-generated music

The proposal is nonlegislative, meaning it is not a bill and cannot enter into law

Rather, it urges the European Commission – an executive body of the EU – to initiate legislation in line with its recommendations

In a statement, Digital Music Europe, a trade body representing Spotify and others, said streaming is “beneficial to the music sector, and leads to more diversity and discovery of music”

“We…strongly question the report’s suggestions that regulation is needed in… music streaming”

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