Byrne has made his comments in an article in the New York Times (“Open the Music Industry’s Black Box.”) The main points that artist makes are:
70 percent of the money a listener pays goes to the rights holders.
Rights holders (usually the labels) determine how much artists are paid.
Labels pay artists a percentage, which averages at 15 percent.
The 15 percent is a poor payment as is compares with the amount an artist makes from CD sales. However, there are no physical costs of manufacture involved, and no distribution expenditure.
Byrne also notes even when an artist grows in popularity, there is little difference financially. He notes: “even as the musical audience has grown, ways have been found to siphon off a greater percentage than ever of the money that customers and music fans pay for recorded music.”
Another issue with Byrne is the lack of transparency, even when he owns his own label. Here, he notes amusingly: “I have my own label and own the copyright on some of my albums, but when I turned to my distributor, the response was, ‘You can’t see the deal, but you could have your lawyer call our lawyer and we might answer some questions.’”
Byrne isn’t the only artist to raise the issue. Billy Bragg has commented on the poor rates and he sees the issue as partly falling with out-of-date contracts. Talking with The Guardian, Bragg notes: “The problem with the business model for streaming is that most artists still have contracts from the analog age, when record companies did all the heavy lifting of physical production and distribution, so only paid artists 8 percent-15 percent royalties on average.”
Echoing Byrne, Bragg adds: “Those rates, carried over to the digital age, explain why artists are getting such paltry sums from Spotify.”
In related news, in the U.S., performers of songs are not paid when their songs are broadcast on public and commercial radio. To address this, a campaign is running called Respect. The campaign is named after Aretha Franklin’s soul classic, noting that because Franklin did not write the song she receives no royalties from air-plays.