Mike Fabio wrote a great post about Spotify a couple weeks back. It accompanied the relaunch of Tidal, a streaming music service owned in part by Jay-Z. Tidal had an elaborate press event in which a parade of artists took the stage to decry the pittance they’re paid by other streaming music services.
Here’s the gist:
It’s scary for artists to learn how many people have listened to their music, and compare to the fractional royalty statements they’re being sent. Thing is, it’s not Spotify’s fault.
It’s the labels.
See, all those artists on the stage are signed to labels. Their contracts dictate that the music they record is owned by those labels, sometimes in perpetuity. And most of those artists have publishing deals that take a chunk out of their performance and mechanical royalties.
The reason artists don’t get paid from streaming services is that they don’t own the music that they record.
I’d take issue with that “music is owned by the labels in perpetuity” bit, but otherwise, Fabio’s post is great and you should read every word.
As an aside, copyright lasts for 70 years after the artist dies, which probably feels like an eternity, but it’s not. Let’s just agree that record companies own the copyrights to the music for almost forever.
That’s important, because when you own the copyrights, you get the money. And there’s a lot of money here. Take Pandora. They paid record companies over $440 million last year. Subscription music services as a whole paid out $1.57 billion in the year 2014.
That same Guardian story quotes the same music industry trade group, the International Federation of the Phonographic Industry, which says the global music industry as a whole generated just under $15 billion last year. So streaming music is just about one-tenth of the music industry.
Well, for now. Streaming music revenue was up 39% from 2013 to 2014. That’s a pretty insane jump. Artists complaining about streaming music services are looking to the future.
But really, if artists are upset at the size of their royalty checks, they ought to be looking at record companies, not streaming music services.