Fair Trade Music (FTM) is an independent, not-for-profit campaign backed by more than 500,000 music creators from around the world. It is dedicated to building an equitable music ecosystem that treats everybody in the music value chain fairly. From creator to consumer and everyone in between.
We are achieving this by encouraging like-minded organizations that operate in a transparent, sustainable and ethical way, to join us in standing behind this shared objective. Via this endorsement program, we’re also helping to give creators and consumers the information they need to make better choices when distributing, streaming or purchasing music.
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 to achieve this, we need a music economy that is above all, equitable and sustainable.
This evolution is very much needed today. Music creators have embraced the digital age because it has opened up the entire world for us in new and exciting ways. Unfortunately, almost none of the enormous revenue it generates is reaching those who actually make the music. As the world transitions from physical to digital distribution, this crisis necessarily intensifies. It is especially damaging for new artists and non-performing songwriters, but also has a more widespread negative impact both within and beyond the music business.
Adopting Fair Trade Music practices would give artists, songwriters and composers the chance to earn a living from their work. It would help create more jobs for musicians, recording engineers, producers, record companies and music publishers. It would also drive growth in numerous other ancillary industries such as broadcasting and live performance. We believe that the ethical path that Fair Trade Music nurtures will unleash the true economic and creative potential of our connected world.
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.