The UK Department of Culture, Media, and Sport is launching an inquiry into music streaming services, including Apple Music, Spotify, and YouTube, to ascertain whether musicians are paid fairly (via BBC News).
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The inquiry comes after complaints from artists that the payments they receive for their work are "negligible."
The growth of the streaming market "cannot come at the expense of talented and lesser-known artists," said Culture, Media, and Sport Committee chair Julian Knight MP.
The inquiry is set to begin next month, and will seek to gather evidence from industry experts, artists, record labels, and streaming services themselves.
Apple Music pays the most at £0.0059 per stream, followed by Spotify at £0.002 to £0.0038 per stream. The lowest paying service is YouTube, which pays about £0.00052 per stream. These funds are then divided between rights-holders, resulting in artists receiving just 13 percent of revenue on average.
It is reported that in May, violinist Tamsin Little received £12.34 for millions of streams over a period of six months, and electronic artist Jon Hopkins made just £8 for 90,000 plays on Spotify.
Algorithms might benefit platforms in maximizing income from streaming but they are a blunt tool to operate in a creative industry with emerging talent risking failing the first hurdle.
We're asking whether the business models used by major streaming platforms are fair to the writers and performers who provide the material. Longer-term we're looking at whether the economics of streaming could in future limit the range of artists and music that we're all able to enjoy today.
In addition to the matter of pay for artists, MPs will investigate how streaming services' playlists and algorithms can distort the music market, and whether new music is being suffocated by the dominance of popular artists such as Ed Sheeran, Ariana Grande, and Drake.
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Top Rated Comments
If someone came to you and said, “I know you’re making thousands of dollars a month with album/song sales, but with our new streaming service, you can be making tens of dollars a month, just sign here!”, why jump on it?
I seem to recall the excuse given early on by Spotify and others was, “well, but if we pay the artists more the service won’t be profitable.” Well, that’s a sign that your service isn’t charging what it needs to. Somehow convincing your suppliers to sell to you at well below their cost, so your business model can be profitable to you, is a pretty neat trick. If your other argument is, “well, but the customers won’t pay more that $10 for our service, so you have to sell to us at below cost”, then maybe that’s a sign that you don’t have a viable business model in the first place. And rather than saying, “GTFO”, the artists/labels figured, what, they’d “make it up on volume?” By treating Spotify as a charity?
Spotify are just gutted because they were going for an Amazon strategy: get all the users and become a monopoly and then start upping the prices once everyone locked in. Then apple came along, bought Beats so they had the music licenses and boom, you've got competition and now you'll never make any money from streaming music! Which is why they are going so hard for podcasts and screaming at apple over 30% (how many people even bother signing up through their phone anyway, doesnt seem to have hurt their business as they have tons of users).
Spotify as a business only makes sense as a monopoly or literally the distribution services run by the majors. Thats it.
The argument is that pre-streaming, it was relatively "easy" (perhaps not the right word to use, but "viable") to be a musical artist. I have friends who were very very successful, independent, made good money every year from music SALES and touring etc.
Then in the past 5 years, streaming services have essentially completely undercut many of their revenue streams. My friends could easily sell 100-150 CDs / vinyl at one 300 capacity show 5 years ago, and they could sell a few thousand albums on iTunes. Now, sales have dried up because people understandably see the value as a consumer to subscribe to Spotify / Apple Music. But the artist never sees the money. You could, fairly easily, make a decent respectable living when music was SOLD.
The latest streaming figures show that, to earn £8.35 per hour (minimum wage in the UK), it would take over 3000 Spotify streams AN HOUR!!! Or over 7000 YouTube plays per hour. It's RIDICULOUS. And that's as an independent artist with no record label. Artists on record labels have an even worse deal.
These services are worth nothing to anyone without the millions of songs that have been lovingly crafted over weeks months and years, and the fundamental truth is that the creators have been put right to the back of the queue for fair remuneration, whilst the CEOs a billionaires.
So getting back to your post... you want musical artists to create something new every day OF QUALITY. Let's pretend that that is even possible for a second, which we know it is not (not to any great quality). Then what... put it out into the world and what? It doesn't answer the problem. It just creates a world full of piss-poor art.
If an artist puts out one album of quality every year (which is just about doable). Let's for arguments sake say that pre-streaming they could easily sell 10,000 copies of that album at £10. That's £100,000. To make that same money from streaming you would require over 35 MILLION streams. The disparity is ****ing ridiculous.