Streaming is the new money in music. It’s easy for listeners and therefore is the most lucrative for businesses. Last year, Sony, Warner, and Universal brought in $6.93 billion in streaming revenue alone, that’s an average of $19 million a day across the trio. Universal’s yearly streaming revenue had an incredible increase of $864 million in 2018, nearly doubling their 2016-17 streaming revenue.
With such big numbers, one would think now is a better time than ever to be a musician, but this newfound wealth is not being shared fairly. Though these record companies are pulling in millions daily, the artists uploading on streaming platforms see very little of that money. Awarding winning cellist Zoe Keating, for example, shared last December that her nearly 2.3 million streams on Spotify netted a mere $12,200.
The per-stream rate of most of these companies are incredibly low. With Apple Music at $0.00735 per stream, Google Play at $0.00676, and Spotify paying out $0.00437 per stream, an artist would need to get 200,000 to 400,000 plays a year to make the US monthly minimum wage of $1,472. And that’s before the label takes their cut.
Naturally, artists are not too pleased with these numbers. David Crosby notably complained about this issue on Twitter last year, and Taylor Swift went as far as removing all of her music from Apple Music, Spotify and other streaming services in protest, only ending her boycott after the service agreed to pay artists for plays during free trial periods.
It’s a constant battle between the streaming services, the record companies and the artists. Because all parties want to make as much money as possible, when the money is in the hands of the company they’ll pay the artist as little as they can get away with and that’s leading to conflict. If this problem doesn’t get resolved soon, it’s likely that these streaming services will receive more and more bad-press from all the underpaid artists.
Though things aren’t great right now, the situation does seem to be looking up for musicians. Last year Spotify’s per-stream rate rose by 13%, Google Play Music’s payout has increased by 12%, and Napster’s payout had a generous rise of 21%. There’s also some action being taken. The Copyright Royalty Board approved 43.8% rate rise that would take place over the course of five years and would increase the pay to artists. This decision was officially published in February, with a 30-day window for appeals opening upon publication. Of course, the streaming companies have a lot of appeals to make, since this rate rise would mean a smaller cut of the revenue for themselves. Google, Pandora and Spotify wrote a joint statement saying that “If left to stand, the CRB’s decision harms both music licensees and copyright owners,” but these appeals can be equated to declaring war against the songwriters, whom the raise is meant to help. The appeals are giving plenty of fuel to the long-burning fire between musicians and streaming companies.
Given how unrealistic it is for artists to make a living wage off of streaming alone, musicians are relying on other ways to make money. Live music is becoming the number one way for artists to make money, driving up ticket prices for concerts and festivals. Even in this age of cheap music, dedicated fans are willing to pay up to get a more intimate experience. As for physical music sales, we’ve all watched that industry go downhill for quite some time (with vinyl being an outlier due to the vintage, throwback-to-before-I-was-born aesthetic of the millennial and gen-z music listeners). Still, concerts, merch, and sponsorships alone can’t entirely replace the money artists expect to be making off royalties from their work, but with such low payouts from the places people are listening to their music, the starving-artist narrative is likely to become all too real for aspiring musicians.
As of now, there’s no clear solution to this problem–solving one would just create another. You can’t keep the companies, the musicians and the listeners all happy. Bigger payout to the artist would mean higher prices or more ads for the listeners, which could turn people away from the streaming services entirely. Yet we also want artists to get paid what they deserve, leading to this seemingly impossible cycle. With the way things are looking now, it seems like streaming services will be slowly increasing how much they pay the artists, which probably means higher subscription cost for consumers, or maybe the record labels will be able to spare a bit of that $6.93 billion profit for the artists without asking for more money from listeners.
This problem is making a big impact on a lot of people, even Elon Musk, who is dating Canadian pop artist Grimes, tweeted last year denouncing streaming services for their “crazy low payout.” Like Elon, while most people aren’t musicians trying to make a living off streaming, many know and care about someone who is. So until the big companies can get around to fixing this problem, fans are likely to feel motivated to support the artists they love by buying merchandise, going to concerts and donating to crowdfunding services like Patreon, while still putting pressure on the companies to make a change.