Artists Decry the “Trickle” of Money From Streaming Services

melting_vinyl_photoshop_brush_by_sinner_pwa-d6c7no9
Trickle down economics has musicians receiving paltry sums from streaming royalties. (Image by Sinner-PWA)

A recent article published by The Tennessean reported that producer and songwriter Kevin Kadish only received $5,679 in royalties from 178 million streams for his hit song “All About That Base”.  Kadish spoke at a Congressional roundtable hosted by the House Judiciary Committee, where the major topic of discussion was the  Songwriter Equity Act which, via a Copyright Royalty Board, sets the guidelines for artists’ compensation for radio airplay and streaming services .

Many musicians, producers & songwriters currently feel that they are being shortchanged by streaming services because they are not receiving the fair market value for their copyright material. They also claim that the inequity is due to a lack of transparency in how royalties are actually brokered and distributed.  Kadish along with several other members from all corners of the music industry are pushing for a modification to the Songwriter Equity Act, which would seek to create a willing buyer, willing seller arrangement for songwriters and publishers. Copyright owners would be able to offer the fair market value of their songs, including synchronization licensing, as evidence when arguing the digital royalty rates at the federal Copyright Royalty Board.

loss-meaningmeat-splsh
Streaming services hope to keep royalties to artists to a minimum. Image by Shutterstock.com

Meanwhile stocks for streaming services like Pandora are spiking with the anticipation that the Copyright Royalty Board will keep royalty rates low for streaming services.  While Pandora touts its platform as great exposure for up-and-coming and little know artists, they also try to negotiate the lowest rate possible to pay those artists for the right to stream their music.  Considering that the rate of compensation over the last 100 years has only increased by 7 cents, to 9.1 cents per song, its apparent that something needs to change in order to rectify the disparity of compensation that artists must endure.

Dare to Stream: Artists wrestle with the pros & cons of music streaming services

NoSpotifyNeilYoung
Neil Young takes a stance against streaming music. Photo credit (AAP)

Canadian-born folk rock icon Neil Young recently decided to remove his music from streaming services like Pandora & Spotify, joining other major artists like Prince, Tool, Bob Seger and Taylor Swift.  Members of this amorphous group have either parted ways with streaming services, or have out-right refused to allow their music to touch the digital realm.  For Young, the issue simply rests with the compressed quality of music that streaming services deliver.  Taylor Swift claims her departure from Spotify was about standing up for “the superfan” and making a statement on the current status of the music industry.  However, she has recently reached an agreement with Apple to stream her latest album on their service.  Of course, when you’re an established artist with a cadre of lawyers and a back catalogue that pre-dates streaming music, it’s easier to take a stance against “the powers that be” for a noble cause.  But chivalry aside, what about the money made from streaming services?

The Rethink Music initiative at the Berklee College of Music’s Institute of Creative Entrepreneurship recently released a study examining the business practices of the music industry.  Business World Online examined the Rethink study finding that the flow of money, which begins with a streaming service and ends at the artist, can often involve a convoluted web of licensing agreements and third-party side deals.  Major artists have vast resources and industry leverage to help navigate multilayered and confusing agreements.  Smaller artists simply don’t have the resources or influence.  Artists such as Taylor Swift can sign lucrative exclusive deals with specific streaming services or, in the case of a band like Tool, can afford to forego digital releases all together in favor of vinyl.

On the other side of the album you have smaller independent artists who draw a certain amount of cache and exposure from streaming entities. These artists are willing to accept the small penance generated by streaming services in order to garner attention for live shows and merch sales.  The perception also exists that smaller artists are facing the same challenges they faced in a pre-streaming era: major corporations consolidating their power, money, and influence to divert money from the artist.  In many ways, it’s the same old song, just compressed to fit the new digital era.

Depending on which side of the digital divide an artist camps relies on their core philosophy regarding digital music. And for folks like Neil Young, the philosophy is quite clear: “streaming sucks“.

Wrapping Up the Cloud (Pt. 5 – Finale)

Flatpicking acoustic guitar guru Tony Rice can be found in The Cloud at the music streaming service Grooveshark.

With the enormous amount of musical data floating around the Internet and the seemingly unlimited number of ways to distribute it, I begrudgingly admit that I only have a  limited amount of time and space to dedicate to the subject, therefore I am wrapping up my multi-part series on Music in The Cloud.  Constraints aside, this post will look at some of the other portions of The Cloud that help musicians promote their music.

The Swedish music streaming company Spotify has become a major player in the music industry in just four short years.  As a “freemiuim” service Spotify allows registered users to search through and play millions of selected music tracks from a range of major and independent record labels.  Commercial advertisements are frequently interjected into the music stream for the free portion of the service, but listeners who upgrade to the premium (paid) service lose the ads and gain access to higher bit rate streams and mobile phone apps.

The way that Spotify benefits the independent musician is that it pays royalties to artists and/or labels for every time they play their song.  Because all the music played on Spotify is tracked – all participating labels and artists have access to reporting from Spotify allowing the artist the ability to see where and how their popularity is growing.  Spotify actually encourages independent artists to use artist aggregators in order to license their music so that it can be  played on music streaming sites.  For instance, Tunecore is one of many digital music distributors (or aggregators) that enters into agreements with music labels and artists. For a fee, Tunecore will distribute and stream digital copies of single tracks or entire albums to retail outlets like iTunes and amazon.com or music streaming sites like Spotify. Some of the other benefits Tunecore claims to offer musicians (from Tunecore’s website):

  • Musicians retain 100% of royalties and maintain all rights to their music
  • Songs can be made available on music video games like Rock Band
  • Physical on-demand distribution at Amazon
  • A streaming music player for the musicians’ webpage that plays the artists’ own music
  • Physical distribution, licensing and endorsement deals
  • Free digital cover art or physical CD art

Music streaming sites are usually heavily embedded with social media features as well.  Grooveshark, another music streaming service, allows users to sign in with their Facebook, twitter or Google plus account. As users listen to songs, they can post comments and the link to the music on their social media page of preference.  This has huge benefits for musicians when building a fanbase.  For artists, the task of gaining exposure through “word-of-mouth” promotion is transformed online with these types of embedded social media applications.

I’m sure this will not be the last post regarding music in The Cloud, but I want to open the blog to another range of topics. And besides, it’s been too long since I mentioned Valient Thorr.

Till next time…