In a surprise move, the UK PRS for Music performance rights organization (England's equivalent to ASCAP or BMI) has agreed to lower performance rates over the next 3 years to "stimulate the growth of digital music."
The rate, which was set at $.0035, will be lowered to $.00135 per stream. The rate is already so low as to barely make a dent in an artist's income, but to cut it by more than half makes the entire thing a bit of a joke.
The idea is that the less a subscription service or Internet radio station has to pay in performance royalties, the better chance it will have to stay in business. Sounds good on the surface, but the real problem is that once again, it's the artists who will suffer the most. "Let's cut the royalty rate so the stations and digital companies can stay in business," rather than "Let's help the artist's out who are barely making ends meet instead of the distribution companies who are living off add dollars."
Help some of the companies out? They don't deserve it. Bad business models, or worse, no business models at all deserve to die if they can't make a go of it. If an artist or songwriter can't get an equal break, then neither should the companies they deal with.
If the PRS really believes that this will stimulate music sales, they are either out of touch or deluded. Build a better service or have a better model, just the way an artist has to have a song that everyone wants to hear to rise above the crowd.