OP-ED: John Watson On Streaming Quotas: "It's Not A Level Playing Field"

I enthusiastically welcome Jono Harrison’s call for “a proper conversation” about streaming quotas. Some of his analysis seems unarguable but I respectfully disagree with a few key points so thought it might be helpful to reply, as he urged. Hopefully others will do the same.

Let’s start with the things on which I think we agree …

• Export opportunities are at an all-time high because digital technology (including streaming) has made it easier for overseas fans to hear our great Australian artists. 

• Despite bright spots, the domestic profile of new local music is at an all-time low. This is reflected in things like ARIA chart shares and Hottest 100 voting.

• Music Australia and various State government programs are welcome initiatives which are already helping the industry seize big export opportunities. Hopefully, they can also help us ‘turn the tide’ domestically but as ARIA CEO Annabelle Herd has noted, those solutions will “… take time to come to full fruition”. 

• There are many causes for our domestic problems, but one of the biggest is “discovery”. When fans mainly discovered songs via TV, radio and press, Australian music had a ‘head start’ but in our digital world, discovery is now largely driven by global algorithms and that typically puts local content at a ‘handicap’.

• Music’s domestic challenges have much in common with those faced by film, television, news and sport … locals are increasingly drawn to more accessible overseas content. 

• Audio streaming quotas would be complicated to implement.

• The Australia-United States Free Trade Agreement (AUSFTA) is currently a serious impediment to local quotas for streaming video on demand.

From here I think Jono’s path and mine diverge …

Firstly, contrary to Jono’s assertions, it’s been asserted that audio streaming quotas actually would not automatically “contravene” AUSTFA. His “evidence” actually all relates to the streaming of video – audio is arguably a different category. Like him, I’m happy to leave that debate to legal experts but it’s clearly not as black and white as his article claimed. 

More broadly, the whole idea of free trade looks wobbly since Donald Trump decided “tariff is the most beautiful word in the dictionary”; an agreement is not an agreement if only one party upholds it. Plus just last week the President’s tech-bro’s demanded that their (largely tax-free) corporate profits should now … trump … every Australian interest.

All this is fuelling a national debate about whether we are America’s friend, or their patsy so local content quotas could soon look even more compelling. Do Australians really want to passively accept a more American culture and politics right now?

Jono’s article also says music streaming quotas should be shelved due to lack of “evidence” that they work. However, to my knowledge this idea has not actually been tried anywhere partly because multinational corporations resist them. “Absence of an experiment” is clearly not the same as “a result”. 

Perhaps radio quotas might offer some “evidence” because as Tatiana Cirisano notes, “streaming is becoming more like radio”. Jono’s article applauds the new triple j and HIT Network content initiatives (as I do too) so here’s the question … if it will help to have more new Australian music on the ABC and LSTNR apps, then wouldn’t more of it on the Spotify and Apple Music apps help too? 

I understand that younger streamers tend to ‘lean forward’ but as Cirisano explains, it’s not true for all of them and it’s not true for the majority of subscribers. Increasing the local share of the platform would not be a perfect fix for discovery but it can only help and it would mean more royalties flowing to Australians.

That brings us to one of this article’s key points, debunking the central role of playlisting. Clearly, playlists are decreasingly important to music discovery – Algorithms drive most music discovery nowadays so they’re really the main issue on which we should be focussing. Of course, lots of playlists now draw on an algorithmic pool; there might be 300 possible ‘chill’ songs from which the algo selects 30 you are personally unlikely to skip. 

However, most of those pools are curated overseas so few local songs can even be suggested. A similar issue exists with pure algorithmic recommendations; population weight skews everything. Platforms mainly recommend U.S. songs no matter how much Australian music we play. It’s not a level playing field here at home. 

Now of course changing the almighty algorithms is crazy talk … it’s like asking KFC to add a twelfth herb or spice to The Colonel’s secret recipe! “Computer says no!”. However, if you accept a royalty reduction to buy a “Discovery Mode” program, Spotify immediately makes an algorithmic tweak that elevates your music on their platform. So, at its most basic, why couldn’t the 100 most reactive Australian songs on Spotify each week be boosted exactly like Discovery Mode does? 

To be clear, I’m not suggesting this is a magic solution – it’s not – I’m just trying to illustrate that algorithmic tweaks are possible despite the patronising scoffs of corporate spokespeople. Yes, they’re complicated and valuable equations, but they’re still just mathematical formulae. All it takes to tweak their recommendations are a few lines of code … plus corporate will.

I fully acknowledge that the choices behind these coding tweaks can be complex, as Jono explains compellingly, but “corporate will” is unlikely unless the prospect of quotas provides leverage.

In fairness, as excellent articles like this explain, Spotify and Apple Music are facing their own challenges. TikTok is where most new music discovery is happening these days. YouTube and social media apps also play key roles, as illustrated by Jono’s stats about many younger listeners coming to streamers looking for specific tracks they discovered elsewhere. 

So, all of these algorithms are causing “discovery” issues, not just the streaming ones. Spotify is still the largest source of royalties and will inevitably attract the most attention, but it would be unfair to blame their small local team for all our problems – they make positive differences every day, they help drive exports, and they are battling global forces beyond their control. 

Local academic research does graph a clear downward trend in domestic Australian hits since the arrival of streaming, but it has been turbocharged lately by the explosion of pure algorithmic platforms, particularly TikTok. There are fewer Australian songs in our “feed”, so we end up with fewer in our ‘diet’. 

This might all seem contrary to the famous work of Spotify’s former Chief Economist, Will Page and Chris Dalla Riva. They used the term “Glocalisation” to describe how Spotify has actually increased the amount of local music on most European charts. That makes sense of course … fans wanted to hear more lyrics in their own language. However, near the end of their article the authors noted some important – and chilling – exceptions to this broader trend:

“… market size clearly matters too … streaming platforms will be well resourced in markets like Germany but less prevalent in German-speaking countries like Austria and Switzerland, meaning if you're a non-English market with a bigger neighbour that shares your mother tongue, expect to be deprioritized. The same holds for France and its French-speaking neighbours Belgium and Luxembourg, along with the UK and neighbouring Ireland.”

Elsewhere in that article the authors even call Ireland a “vassal state” of England (they hopefully meant it in a purely musical sense!). Page and Dalla Riva noted that in recent years Ireland has been swamped by English language songs from bigger countries just like the small, German-speaking nations of Austria and Switzerland have been swamped by German songs. 

Surely the only reasonable conclusion is that Australia, New Zealand, Canada (and increasingly the UK) have similarly become “vassal states” of the U.S. because we all speak English, but the Americans have a much bigger population. According to these streaming-friendly experts, in an algorithmic world when there’s a shared “mother tongue”, “market size clearly matters”. Australian content should “… expect to be deprioritized”, not only on Spotify but on every multinational platform where music gets discovered.

So what, if anything, are we going to do about all this? We’re clearly never going back to the days of local songs having “head starts” over American ones but should we just accept these “handicaps”? I doubt they are the main reason why calls to Support Act’s Wellbeing Helpline rose 13% last year after already doubling during covid but they sure aren’t helping. 

Compelling big companies to change their algorithmic outputs will obviously be extremely difficult – and I agree totally with Jono that the specifics of any quotas would be complicated – but that doesn’t mean we should do nothing. Discussing it civilly is a first step – hence why I’m engaging with this discussion. 

By the way, corporate obstacles also exist in many other areas where Australia’s music industry is currently seeking to elevate our artists’ work … from Maggie Collins and the AAM’s advocacy for Michael’s Rule, to radio quotas and removal of the 1% cap.

Upskilling artists and managers, investing in globally competitive production and songwriting development, plus a slew of reforms to the critical live music sector are among other important “local content” conversations for us to be having, with each other and with politicians as we head into a federal election. Everyone’s busy so it’s very tempting to bury our heads in the sand but that clearly will not change anything, and change is needed.

Unified’s Founder, Jaddan Comerford, recently made a compelling public plea for “positivity” in our music community. Notwithstanding everything written above, I endorse his sentiments, particularly his call for grass roots support of the local music that we love. 

As he rightly notes, there are lots of good news stories out there – particularly export ones – and we should celebrate every single one of them. Loudly! We should not let growing international opportunities for our artists get overshadowed by the domestic challenges that they face. But equally, we should not blindly accept things that unfairly disadvantage Australian culture even if it means ruffling some feathers or sounding an occasional “negative” note. 

So, along with many other initiatives, I personally think we should explore every possible means of getting algorithms to serve up more local content. Maybe the prospect of audio streaming quotas can help make that happen and that’s why I don’t think we should just rule them out. Meanwhile, I agree with Jono that it’s not mainly about playlists, it’s not just about music, and it’s certainly not only about Spotify. 

In my opinion quotas are just part of some much bigger conversations we need to be having. In those discussions, I think we need to avoid demonizing, self-dealing, and oversimplification – there’s already way too much of that affecting our increasingly Americanised country.

What do you think?

John Watson is the President of Eleven: a music company and John Watson Management. The companies’ clients include Birds Of Tokyo, Peter Garrett, Gotye, Missy Higgins, Midnight Oil & The Presets. John also co-manages Cold Chisel with John O’Donnell. He is a patron of the AAM, a board member of The Australia Institute and a long time board member of Support Act. He is this year’s recipient of the AAM Legacy Award.

The opinions in this article are solely those of the author, and do not necessarily reflect the views of his clients nor of any organization with which he is associated.