Without fail, every time I talk about the money to be made from streaming music services I receive feedback from people suggesting I'm an ignoramus
to people such as Portishead's Geoff Barrow telling me to "wake the fuk up
!" and "bore off you knob
)" I stand by my opinion that there's plenty of money to be made by the music industry from streaming services and that artist's vitriol toward these services is misplaced and misleading. For example, Kendrick Lamar's newest album To Pimp a Butterfly
was streamed 9.6 million times in its first 24 hours of release on Spotify. Based on numbers provided by Spotify (Link
), this earned a payout of between $921
,600 and $1,290,240. Then how is it that Portishead made just $2,500 off 34 million streams when the math works out to more like $204k to $285k? As David Byrne said, "Same as it ever was." The rights holders, namely the record labels, are making the money. When artists complain that they're making little to no money from streaming music, it's more often than not explicit or implicit that services such as Spotify are to blame. As expected the artist's fans eat it up, retweeting and echoing the same misleading pseudo-facts that are really a disservice to the artist, the fan, and everyone except the record label. I hate to say it, but those who aren't making as much money as they wish from streaming need to look inward rather than outward. If you signed your rights away to a record label, you're getting that to which you agreed. It doesn't matter if the contract was signed before the advent of streaming. The contract was still signed and based on the long notable history of record labels' "terrific" treatment of artists, it could have been foreseen that when in doubt the label will come out on top. In other words, expect to get screwed if something unforeseen pops up. Don't get me started on artists who are still trying to hold back the hands of time and kill the streaming services. I get it that you used to make more money from CD sales. However, the free market has spoken. People don't want what you're selling, if you're selling CDs or lossy downloads. Getting back on track, it's the rights holders who are making plenty of money from streaming services and who stand to earn much more as more people enter the streaming music fray.
Enter the latest earnings report from Warner Music Group (Link
) and the Sony Music contract with Spotify (Link
). The former proves that record labels are making more money from streaming music than downloads. The latter proves that the rights holders are pocketing the money from streaming services.
"Notably, in this quarter we saw continued growth in streaming revenue which surpassed download revenue for the first time in the history of our recorded music business. Our commitment to being at the forefront of industry change as well as our ongoing investment in artist development is the foundation of our continued success
- Stephen Cooper, Warner Music Group’s CEO
"In the wake of Swift’s departure from Spotify, many musicians rallied to her cause, vilifying streaming services that paid a fraction of a penny per play. But this contract makes it clear — the pay per stream rates aren’t the only issue. According to its financial disclosures, the majority of Spotify’s revenue, around 80 percent, has been flowing out the door to the rights holders. "You can’t squeeze blood from a stone," said David Pakman, the former CEO of eMusic and partner at Venrock. "Your beef can’t be with Spotify anymore
- The Verge
Again, I am all about purchasing music and paying those involved with creating the music I so love. But, I can't do much about the contracts signed by artists that put the majority of my payments into the pockets of someone else. I'm also not anti-record label. Labels are in business because they provide a service artists want or need. Streaming is here to stay. I hope the conversation about streaming service payouts can be funneled in the right direction. I'm also open to other opinions and appreciate comments whether they agree with me or not.