DiMA president and CEO Graham Davies: “We’ve got to be careful with streaming’s success story.”

Eamonn Forde Meets… – each month, the veteran music business journalist speaks to a senior industry figure about the topics that really matter – and gets the opinions of the people who make the decisions that count.

April 2024: Graham Davies, president & CEO of DiMA (the Digital Media Association). He talks about why heavyweight lobbyists like Apple Music and YouTube still need their own lobbying voice, how peacekeeping must coexist with firefighting, where greater transparency is needed in the MLC and why AI will throw music rights and legislation into an Escher drawing. 

Graham Davies joined DiMA in November 2023. It is a small organisation on a staffing level (just four people there, although it has been running since 1998), but also on a membership level. There are currently only six member companies, but between them they control the lion’s share of the streaming music business – Amazon, Apple, YouTube, Spotify, Pandora and Feed.fm. (International membership expansion is planned but unlikely to happen for a while.)

In the US alone, Apple spent $9.4 million on its own lobbying in 2022 (up 44% from 2021), Google (parent company of YouTube) spent $10.9 million that year and Amazon spent $19.7 million. Even Spotify, the biggest pure-play member of DiMA, spent close to €1 million on EU lobbying in 2022. 

Given just how powerful and rich most of these companies are, one might wonder why they need a dedicated lobbying group.

“You’re absolutely right – they’re very successful companies,” says Davies. “While they have resources, what DiMA is seeking to do is to advocate on behalf of music streaming and the service community […] The record industry needs an interface to that very substantial element of the music industry.”

By way of political analogy, Davies has crossed the floor, having previously been at PRS for Music and the Ivors Academy (where he was CE). “It is a massive contribution that the streaming services have made to the industry,” he says, having previously been on the writer/publisher side. “For me, there’s an opportunity to tell that success story more strongly – champion it and support it […] I’m here, I want to talk, I’m open.”

Having now been on both sides of what can sometimes be a combative relationship between rightsowners and services (arising out of a tense mutual dependency), I ask Davies if he sees himself as digital music’s Kofi Annan or its Red Adair. 

“I hadn’t given that enough thought!” he laughs. “You’re probably going to give me sleepless nights trying to work out which one I’m going to be […] DiMA can hopefully be an added-value place for dialogue and second opinions, which is probably less the second one [Red Adair] and more the first [Kofi Annan].”

Where the money goes in the music business has always been an issue of towering importance, but it has never been under greater scrutiny, both within the industry and publicly. 

“[Regarding] educating on where the money goes, I think there’s a lot to do there,” says Davies. “There is a lot of miscommunication and misunderstanding.”

Key to this, he says, are DiMA’s efforts around “modernising of licensing and operations”. Last month, David Israelite of NMPA spoke to Music Ally about the importance of boosting streaming mechanical licence income. Davies also says debates around the Music Modernisation Act and the Mechanical Licensing Collective (MLC) are top of DiMA’s agenda. DSPs are not so effusive about the MLC. They have, it is fair to say, questions. 

“The need for the MLC to operate transparently, efficiently and with neutrality, those are the key themes for us,” he says. “That’s what will lead to a successful MLC over the next five years.”

How, then, is MLC doing from DiMA’s perspective (especially since its operations costs are paid for by the DSPs on top of the licence rates)?

“We could do with more transparency in terms of how the money’s being spent,” says Davies, bluntly, saying the Copyright Office should oversee this. “We’ve got some concerns over whether there is the right level of incentive for them to drive efficiency on cost, because the costs are many, many times more than they were pre-MLC. Then the issue is one of neutrality and remit […] We don’t see it as a rule-setting body; we see it as an administrator.”

(Some of the tension between these parties is now playing out in public. After speaking to Davies, in late March the NMPA responded to a DiMA blog post – which expanded on this call for “more transparency” from the MLC – by saying that DiMA’s “calls for change are not a good faith effort to make the MLC more effective and transparent, as they argue, but the opposite.” DiMA responded by saying that, “drawing attention to the importance of transparency, efficiency, and neutrality to the future success of all collective rights management structures should be a call to action that all can and should embrace.”)

Keeping with the money theme, I ask Davies if, as per Israelite’s comments last month, the subscription streaming market can sustain regular price increases. 

“What we would say is that there’s a really important journey that the streaming services have taken the consumer on,” he says, moving cautiously. “And we’ve established this market is very important, it’s very successful. We’ve got to be careful with that success story. Whatever analysis David has, we’ve got to be careful on affordability. In terms of the pricing strategy that the members take – over to them. All we can see is that business models will, and should, continue to evolve.”

On the theme of AI-generated music, and fears it is “flooding” DSPs, I ask if there are moves by services to mark up such music in the same way that they do with explicit lyrics.

Davies argues that the flaws around metadata are causing enough headaches without adding in a new variable. “That’s lacking, let alone a labelling for AI,” he says. “And there’s no format for that. We want to be absolutely involved with the industry in terms of understanding the issues and how we address them. But there’s a big concern right now in terms of not interfering with the established principles and processes, which could really be problematic.”

Will copyright law ever be able to keep up here? “You’ve got such fast moving technology,” he says. “And then you have existing laws.”

Is the reality that AI is like an MC Escher drawing, spiralling out in multiple directions that defy logic and make it impossible for the law to follow every twist? 

“It almost feels like Moore’s Law,” he says. “All we know is that it’s going to be a really significant change for every single aspect of business and life.”

Red Adair or Kofi Annan in the age of AI? Perhaps the reality for DiMA is to be both, chasing after each other around staircases pointing in competing and gravity-confounding directions.