Biola's student-run newspaper
for 80 years

Streaming services pause fair pay

Companies like Spotify exploit artist creativity with unequal pay.  |  Illustration by Trevor Lunde/THE CHIMES

 

 

On the night of this year’s Grammy Awards, Neil Portnow, president of the Recording Academy interrupted the barrage of music performances and awards to give a speech about an arising issue in music: artist advocacy. During the speech, Portnow talked about music streaming services are not paying artists fairly for their work. This idea of unequal pay remains true, but the issue lies in the users not caring.

A COMPLEX MATTER

The concept of music subscription services seems pretty fair on the forefront. Users pay a fee every month — excluding Spotify’s free service — and get unlimited access to a massive song bank to listen to what they choose. For every stream of a song, the artists receive a small fee. Unfortunately, streaming services do not pay the artists enough and tend to allot royalties unequally.

The matter is complex because these streaming services complicate the process on purpose to make the user, and in some cases the artists, not care. For example, Spotify’s artist payout model looks like a formula learned in a math course rather than in music business.

According to the same page, artists are also paid based on their popularity. The biggest artists are only paid up to .0084 of one cent per stream. It hurts smaller artists more because they can receive pay as low as .0006 of one cent per stream. On both ends of the spectrum, though, most of the money these artists make goes to their label, as shown in Spotify’s model.

THE BIGGEST CULPRIT

Spotify is the biggest culprit of all streaming services because of its free service. When the company is not profiting from users paying the premium rate, they decrease the amount of royalties given to the artist to compensate for the loss. In some cases, the royalty rate of the free service can be 11 times less than the royalty rate of Spotify Premium.

On a macro scale, streaming also hurts the music sales industry as well. CD sales declined by 31 percent in the U.S. in 2015, and digital downloads declined by 20 percent in the second half of 2015 alone. Streaming causes this because people pay streaming companies to listen to music rather than the label and artist directly. The business model Spotify and others have created favor themselves, rather than the artists and the industry.

AN ETHICAL ISSUE

Taylor Swift was right in only letting Apple Music “1989” after she negotiated equal pay for smaller artists. Adele is right in not letting streaming services have access to “25.” The greater issue in this business model is that the user does not see any of this as a problem that needs to be fixed.

The common user does not recognize that people make a living off entertainment. It is an ethical issue that cannot be overlooked. Streaming seems attractive now, but it will stop aiding the music industry when companies can no longer support the creative process found in artists due to a lack of funds. Those funds lie within companies who do not even produce music.
 

To support artist advocacy, tell your members of Congress to support the Fair Play Fair Pay Act at http://actnow.io/cjIAc5y

Your Turn.  Post a Comment

  1. professional musician

    This is just ignorant and factually incorrect.

    1) Spotify is the biggest culprit? It pays MANY MANY MANY times more than Youtube, and infinitely more than Facebook which does nothing to stop artists from being freejacked. I make more money from Spotify than from iTunes, YouTube, Facebook, Tidal, and all other streaming services combined. So does nearly every small label I've spoken to in the past couple of years.

    2) Blaming Spotify for paying money to the labels when it is legally required to do so if they are the rights holders is idiotic and shows zero understanding of how the music business (or any other business) operates. Furthermore, it's just not true in the case of independents. It is not Spotify's fault that so many artists sign crappy label contracts. I receive thousands monthly from Spotify, and it goes 100% to me, the artist, because I did not sign my life away to a label. Please do some research before spreading this kind of misinformation.

    3) Taylor Swift did not negotiate equal pay for smaller artists. This article is a joke. Just give up "journalism." It's not your thing. There's a lot of misinformation out there on these topics, but this "article" is the absolute worst I've ever seen. Did you even bother researching any of it, or did you just not understand anything that you read?

    4) Spotify has INCREASED the overall share of artist compensation which was in the toilet before it came along. That's just a mathematical fact. Why not quote the decline in 8 tracks while you're at it? Most computers sold haven't even had an optical drive of any kind for YEARS now. Some of the newer cars don't even have a cd player at all, and you're blaming Spotify for declining CD sales? Wake up. This is not 1990. Anyone who's relying on CD sales for their business plan is a fool.

    5) The business model favors Spotify and not the artists? Spotify pays out 70% to whoever owns the music, genius. Independent artists keep 100% of that. Back in the day when artists HAD to go through labels to be heard because outlets like Spotify didn't exist, they artists made an average of around 6% of the sales revenue they generated. You want to go back and live in the stone ages, knock yourself out.

    6) You are terrible at math. There is no such thing as "11 times less". Your per stream figures are off by a factor of 100, and a factor of 1000 respectively. A cent and a dollar are not the same thing... but you got it even more wrong than that. Incredible. It "looks like a math formula learned in a math class rather than in music business" because you understand nothing about either the music business... or math.

    Please stop pretending to be a journalist and please stop posting such misinformed and sloppy BS.
    June 17, 2016

Your email will not be published as part of your comment.
Biola University
13800 Biola Ave. La Mirada, CA 90639
1-562-903-6000
© Biola University, Inc. All Rights Reserved.