A new iTunes streaming service could be a disaster for songwriters

Two rumours in short succession have hinted that the digital music scene is moving firmly away from the buy-to-own (or rather, pay-to-permanently-license-with-terms-just-short-of-ownership) model – of iTunes, the Amazon MP3 Store and Bandcamp – towards the model which services like Spotify and its American competitors Pandora and Rdio use, where users pay a monthly fee for unlimited access to music.

The Telegraph reports that the BBC is considering launching an iPlayer-style service to make its archive available:

The service, dubbed Playlister, will give licence-fee payers free access to hundreds of thousands of music recordings without paying any additional fees.

The BBC has talked about the idea of making its vast archive of music recordings public in the past, but has always run into trouble clearing the rights.

However, it is understood to be in talks with Spotify and similar music services, such as the French-run Deezer and Apple’s iTunes music store in an effort to side-step the problem.

Those services have already signed bulk rights deals with music labels, who opt in because they would prefer to make some money from the online streaming service rather than watch the shift to digital formats obliterate their sales altogether.

Last month, the Wall Street Journal reported that Apple is planning a similar streaming music service:

Apple Inc. is in talks to license music for a custom-radio service similar to the popular one operated by Pandora Media Inc., according to people familiar with the matter, in what would be a bid by the hardware maker to expand its dominance in online music.

Apple’s service would work on its sprawling hardware family, including the iPhone, iPads and Mac computers, and possibly on PCs running Microsoft Corp.’s Windows operating system, according to one of these people. It would not work on smartphones and tablets running Google Inc.’s Android operating system, this person added, highlighting the mounting battle for mobile dominance between the two technology giants.

This second type of service is possible because the licensing required to do it is less like a sale, and more like running a radio station. In the US, for instance, services like Pandora are required to have a cap on how frequently any one user can play any one song, to encourage people to buy songs they particularly want to play.

But as an interesting post at Digital Music News, from attorney Steve Gordon, argues, one of the most important differences between the two types of license is that in the radio-style licenses, songwriters are increasingly struggling to get any payment at all:

If Apple wants to launch their much anticipated, Pandora-like music service, they must negotiate directly with Sony/ATV for public performance rights. That's the word on the street, and if true, a dangerous turn of events. The reason is that until recently, performing rights organizations – ASCAP, BMI and SESAC (the "PROs") – offered blanket licenses on behalf of almost all the publishers, including all the majors. This dramatically changes that, with negative repercussions for songwriters.

In other words, just because you might get your music legally these days, don't think that the creators themselves are out of hot water.

Tim Cook launches new iPods at a press event last month. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty Images
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A simple U-Turn may not be enough to get the Conservatives out of their tax credit mess

The Tories are in a mess over cuts to tax credits. But a mere U-Turn may not be enough to fix the problem. 

A spectre is haunting the Conservative party - the spectre of tax credit cuts. £4.4bn worth of cuts to the in-work benefits - which act as a top-up for lower-paid workers - will come into force in April 2016, the start of the next tax year - meaning around three million families will be £1,000 worse off. For most dual-earner families affected, that will be the equivalent of a one partner going without pay for an entire month.

The politics are obviously fairly toxic: as one Conservative MP remarked to me before the election, "show me 1,000 people in my constituency who would happily take a £1,000 pay cut, then we'll cut welfare". Small wonder that Boris Johnson is already making loud noises about the coming cuts, making his opposition to them a central plank of his 

Tory nerves were already jittery enough when the cuts were passed through the Commons - George Osborne had to personally reassure Conservative MPs that the cuts wouldn't result in the nightmarish picture being painted by Labour and the trades unions. Now that Johnson - and the Sun - have joined in the chorus of complaints.

There are a variety of ways the government could reverse or soften the cuts. The first is a straightforward U-Turn: but that would be politically embarrassing for Osborne, so it's highly unlikely. They could push back the implementation date - as one Conservative remarked - "whole industries have arranged their operations around tax credits now - we should give the care and hospitality sectors more time to prepare". Or they could adjust the taper rates - the point in your income  at which you start losing tax credits, taking away less from families. But the real problem for the Conservatives is that a mere U-Turn won't be enough to get them out of the mire. 

Why? Well, to offset the loss, Osborne announced the creation of a "national living wage", to be introduced at the same time as the cuts - of £7.20 an hour, up 70p from the current minimum wage.  In doing so, he effectively disbanded the Low Pay Commission -  the independent body that has been responsible for setting the national minimum wage since it was introduced by Tony Blair's government in 1998.  The LPC's board is made up of academics, trade unionists and employers - and their remit is to set a minimum wage that provides both a reasonable floor for workers without costing too many jobs.

Osborne's "living wage" fails at both counts. It is some way short of a genuine living wage - it is 70p short of where the living wage is today, and will likely be further off the pace by April 2016. But, as both business-owners and trade unionists increasingly fear, it is too high to operate as a legal minimum. (Remember that the campaign for a real Living Wage itself doesn't believe that the living wage should be the legal wage.) Trade union organisers from Usdaw - the shopworkers' union - and the GMB - which has a sizable presence in the hospitality sector -  both fear that the consequence of the wage hike will be reductions in jobs and hours as employers struggle to meet the new cost. Large shops and hotel chains will simply take the hit to their profit margins or raise prices a little. But smaller hotels and shops will cut back on hours and jobs. That will hit particularly hard in places like Cornwall, Devon, and Britain's coastal areas - all of which are, at the moment, overwhelmingly represented by Conservative MPs. 

The problem for the Conservatives is this: it's easy to work out a way of reversing the cuts to tax credits It's easy to see how Osborne could find a non-embarrassing way out of his erzatz living wage, which fails both as a market-friendly minimum and as a genuine living wage. A mere U-Turn may not be enough. 


Stephen Bush is editor of the Staggers, the New Statesman’s political blog.