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Stream and starve – Lousy streaming rates and ripoffs galore for musicians

The music publishers, streaming companies and record companies make billions. The suits make the money, the musicians get dog biscuits.

Spotify on iPhone. — Photo: © Jonathan Nackstrand, AFP
Spotify on iPhone. — Photo: © Jonathan Nackstrand, AFP

The music industry has been famous for generations for ripping off musicians wholesale. Doesn’t matter how good you are or how popular you are. Doesn’t matter if you’ve written ditties or anthems. You’ll get the wrong end of contracts and royalties deals. Now, you’ll be on the wrong end of streaming rates, too.

This is a huge mess for musicians, and it’s doing a lot of damage. The payment models for streaming are truly abysmal.  The irony of the fact that musicians making streaming fortunes don’t enough money to make more music is glaring. It’s also totally unnecessary, not to say insane.

The music publishers, streaming companies and record companies make billions. The suits make the money, the musicians get dog biscuits. They pay pennies, or literally half-pennies in return. For musicians trying to manage the overheads of playing, recording, eating and breathing, it’s an ongoing disaster.

Successful artists do make much more in the streaming environment, but they get shafted, hard, too. The royalties model used by Spotify and Apple music is one of the problems. (YouTube, a different but equally problematic ballgame, is also famously way behind the eight ball in streaming payments, too, for god only knows what commercially unjustifiable reason. Talk about not seeing wood for trees…)

A finite “pot” of money is paid out every month. The pot will adjust according to whatever mystic algorithm happens to be around, and the distribution of payouts will be horribly low for the majority. This is a common royalties model, from about 20 years ago, and it’s institutionalized in all media.

You can see how inconsistent this is. However many hits on whoever or whatever, it’s a closed circuit in terms of cash payouts. There are some horrible stories in this The New York Times article about artists having hundreds of millions of paid streams and getting very little hard cash.

As if this parasitism wasn’t bad enough, the musicians are already at arm’s length from any money before they start. The suits, meaning publishers and record companies, accountants and hangers-on, get first bites, and they’re big bites, of the money.

Copyright rules, contracts school, and these guys drool. Agents take money, too. So do publicists. Recording costs are often taken out of royalties for artists under contract, sending them broke in some cases. These inbuilt costs can be crippling.

Musicians are saying they can’t afford grocery shopping, regardless of vast numbers of streams. The big dreams become big, sincere, screams. It’s an obscenity in progress, since well before the Beatles. This payment-for-everyone-but-the-artists model, and the grotesque royalties deals, should never have happened, and it can’t continue.

Missing all the opportunities, as usual

Let’s be clear about this:

  • Streaming is the best thing ever to happen to music distribution, at least in theory. Artists have instant access to a global audience. That’s what’s driving the huge streaming hit numbers.
  • Get visible, do some promos, and don’t do 1980s Patches R Us cookie-cutter crap, and you’re probably OK. Any decent song or musical idea can go a very long way, fast.
  • Making music is a lot cheaper and easier than it used to be. Digital recording is simple, and allows for a lot more experimentation than in the past. You can do “remote gigs”, too. (Why not? Schlepping gear to the middle of nowhere is maddening as well as expensive, and you could do a fabulous gig in your own home.)
  • But…And it’s a truly planet-sized but… Not if you can’t get enough money to do the basics, like living. Musicians work for many hours, but on this model they can’t even make America’s miserable, humanity-insulting, minimum wage. That’s actually an understatement.
  • Music companies and the many human excrescences in the industry simply don’t pay. They effectively steal by contract, routinely and regularly. Publishers almost print money for themselves.
  • ..And it’s the people making the products that make them rich who they deprive of the money to make music?
  • How much sense can that possibly make?  

The logic here is “one hit wonder” logic – Artists have shelf lives, according to the industry. The industry can always get more. They see no need to pay more when someone new will come in to take up the slack when artists leave.

Every musician in the industry, bar none, has always been ripped off at some time, and it’s been done “legally”. (We’ll leave out the wholesale fraud and physical stealing of music from writers for now.) Streaming at dismal, humiliating rates is no exception. It’s simply another type of rip off.

There are so many things wrong with this on so many levels:

  • No oversight of the sector. Meaning, absolutely none. You could launder money till the cows grow wings in this environment.
  • Anti-trust laws could also play a role. This global cartel-like arrangement of big players and payments is effectively a blatant monopoly. These are the Googles and Facebooks of music, but unlike Google and Facebook, totally parasitic.
  • Legality. While these streaming deals may not be illegal, they’re highly questionable in terms of income norms and value of work. “Make billions for others, get pennies for yourself?” How could that ever work, because it doesn’t.
  • Basic fairness in payments. Who else has to go through this sort of minefield to make money from their work? Put it this way – busboys, cleaners and janitors don’t, and they get more cash in hand than many musicians.

What to do about it?

A few ideas:

  • Do better business with the artists: Undercutting the ripoffs would be easy enough. Pay artists more. You’d get a worldwide stampede to better deals in seconds. If people got two cents a stream in the hand, instead of half or a quarter of that, they’d be a lot happier. They’d even be able to make more music. NOTE: This means paid per stream, direct to artists, without the shiploads of third parties biting chunks out of that money. Let the rights owners, publishers and the streamers figure out separate rates for themselves, without gouging the artists at all.
  • Audits: There are a lot of hard metrics in streaming that can’t be hidden without obviously breaking the law. How do musicians know they’re not being ripped off? They don’t. They can’t. The legal environment is so complex that they have no possibility of even calculating their actual entitlements under contracts with record companies or streaming services. That has to end. Set a rate of payment, and audit to make sure those payments happen. Blockchain could do that with ease; the tech already exists, it’s called White Rabbit, appropriately enough, and it works well.
  • Automation: Automating music business deals will kill off a lot of the sleazebags in the music industry. It’s cheaper than they are. That means fewer snouts in the trough. Extinction is too good for these bastards, but it’ll have to do. The sooner they become non-existent, the quicker good music and better lives for musicians can happen.
  • Licensing of music by artists: As an owner of rights, you have far more traction commercially. You can license, rather than contract, those rights to distributors. You can control your costs and keep out the bloodsuckers. You need to know what you’re doing, but it’s not really that hard to do.

    If anyone ever invents a language to adequately express how much I despise the industry and the “people” in it, let me know. This atrocity must stop, right now.

Written By

Editor-at-Large based in Sydney, Australia.

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