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Going live: The legalities of paid live streams

As livestreaming becomes the new normal, Gregor Pryor of law firm Reed Smith discusses how artists can effectively – and legally – engage and monetise this online format

29 Jul 2020

The legalities of live streams

The Covid-19 lockdowns around the world have put an end to multiple big-name festivals this year, as well as concerts of all kinds, from huge artists to those playing local venues.

With the future of what a live event will look like in a post-lockdown world still unclear, musicians are turning to alternative methods to reach their audiences. Livestreaming is now an increasingly vital tool, enabling musicians to reach audiences in real time and in a format that most closely reflects live performance. It seems clear that in the near term, virtual concerts will become the new normal. Take One World: Together At Home as just one example of how streaming can be harnessed to deliver live entertainment on a global scale.

Livestreaming platforms make this possible. The technological and operational investment required to operate a stable multifunctional and global online livestreaming capability, at scale, is huge. It is not surprising that the most capable and technically attractive platforms are operated by major tech companies: Facebook, Google, Amazon, etc.

Some platforms have already collaborated with music industry players to support artists’ transition from venues to home. However, artists also need to be aware of how to effectively monetise their live streams, and the applicable rules and regulations that must be followed.

Live streamers are usually required to meet certain criteria, and artists and event organisers should become familiar with each livestreaming platform’s monetisation policies and how to access them. Artists must also check the platform’s terms and conditions, and remember they are responsible for all rights and clearances necessary to perform their music.

Artists can earn revenue by enabling ads placed before, after, or embedded within content. Advertisers typically pay on a cost-per-click or cost-per-view basis, so a live streamer will only be paid if a user clicks on the advert or watches it for a certain period of time. However, an artist should balance this with the risk of putting fans off for using too many.

Brands may also pay artists to produce promoted content or direct viewers to purchase a brand’s products by posting links or discount codes for particular sites, earning the streamer commission on any sales.

Artists need to be aware of how to effectively monetise their live streams, and the applicable rules and regulations that must be followed

In the UK, any advertising or promotions need to comply with the Consumer Protection from Unfair Trading Regulations (the ‘Regulations’) and the UK Code of Non-broadcast Advertising and Direct and Promotional Marketing (the ‘CAP Code’).

The Regulations provide protection to consumers against unfair practices. The CAP Code includes rules about how advertising should be recognisable, and other rules to prevent viewers being misled. If live streamers breach these, the Advertising Standards Agency can require the amendment or withdrawal of an ad, and there are other sanctions co-ordinated through CAP that can be employed in different circumstances.

Many streaming services make it easy for users to give donations to a streamer, and streamers may incentivise these by offering exclusive content. Artists should be aware that most platforms will take a cut. Subscriptions allow paying subscribers to access extra perks such as exclusive content. This is subject to streaming services’ policies and, as with donations, they are likely to take a cut on fees.

Services such as Patreon also allow patrons to directly fund a live streamer, or GoFundMe can finance a project in advance. Just as artists sell merchandise on tour, online store services can be used to sell designs. To ensure compliance with consumer law, streamers may elect to use existing sites such as Merch by Amazon. Certain livestreaming platforms also merchandise to be advertised. YouTube, for example, allows eligible channels to showcase their official branded merchandise on the channel’s page.

Livestreaming has opened up a way for artists to reach their audiences, and a potential revenue stream while live events cannot go ahead. Platforms are adapting in real time to a huge surge in demand while Covid-19 prevents a true live experience.

Considering the rules and regulations involved and, where applicable, seeking advice to ensure compliance with these, will be essential to prevent any regulator- or platform-imposed penalties affecting the artist’s ability to livestream.

 


Gregor Pryor is co-chair of the entertainment and media industry group at law firm Reed Smith.

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