Fair Trade Music International (FTMI) is an independent, not-for-profit organization launched by thousands of music creators from around the world. FTMI provides independent Fair Trade Music certification, informing music consumers who in the music value chain operates in a transparent, sustainable and ethical way, thereby allowing consumers and creators to join hands in supporting equitable music business practices.
The adoption of Fair Trade Music best practices will give artists, songwriters and composers the chance to earn a living from their work, so they can dedicate their lives to making great new music for all to enjoy. But we music creators who support this initiative are not just thinking of ourselves; Fair Trade Music International is committed to a fair music ecosystem. This extends from creators to consumers and includes everyone else in the music value chain.
Simply put, the money that music lovers pay to enjoy music is not reaching the people who actually create it. This hurts all music creators and makes it even harder for new artists, songwriters and composers to break through.
Streaming and digital distribution have helped music creators reach a wider audience than ever before possible – it’s the most exciting revolution in music consumption since the invention of the wax cylinder. But just as the economy needed to adapt to accommodate the advent of recorded music a hundred years ago, FTM can play a decisive role in helping the musical ecosystem transition today.
We don’t believe it is necessary for one party to lose in order for the other to win. The objective for creators, labels, streaming services and music lovers is the same: we all want easy access to the music we love while encouraging the emergence of exciting new artists, songs and compositions.
But if the world is to continue benefiting from the vast cultural contribution made by music creators, the entire value chain needs to be adapted to new twenty-first century technologies in a way that is sustainable for all.
The Fair Trade Music Study
Fair Trade Music is largely based upon the 2014 “Study Concerning Fair Compensation for Music Creators in the Digital Age” commissioned by Music Creators North America (MCNA) and the International Council of Creators of Music (CIAM). Written by Pierre Lalonde, former director of economic research for the Copyright Board of Canada, the report presents comprehensive, empirical evidence that suggests an alternative business model is urgently needed if the digital economy is to be sustainable.
The study concluded that fair trade models may prove more effective in creating a virtuous value chain than government regulation because laws simply cannot and do not keep pace. The Fair Trade Music International independent certification (much like its fair trade coffee predecessor), effectively communicates a clear choice to the consumer at the point of purchase. The success of fair trade coffee and other such certified products demonstrates the consumers’ willingness to make ethical decisions when given a simple, understandable option to do so.
The study also revealed three key findings:
The current level of streaming services’ revenues paid out for the use of music is between 60 and 70%. The report’s author believes that this undervalues music given the services’ dependency on it. Shareholder benefit, is being prioritized above recording artists, songwriters and composers.
The study recommends that no less than 80% of gross revenues from all sources paid to all rights holders would offer fairer compensation for the overall use of music by streaming services.
The split of monies from streaming platforms is geared much more favourably towards multinational record labels at the expense of music creators and others in the music value chain.
The study recommends a more equitable division of revenues between the various rights holders.
The lack of transparency in the negotiating process between multinational record companies and streaming platforms, and the opaqueness of many other aspects of the current value chain, leaves artists, songwriters and composers in the dark about much of their current situation.
The study recommends that all parties should have total access to any and all pertinent information that could impact remuneration.