It’s no secret that the music industry has changed dramatically with the dawn of the internet and streaming. Streaming services have allowed the emergence of a kind of bottomless jukebox. Consumers have access to almost all music at any given moment. Now and Apple is set to change the game again.
We’ve come a long way since stealing Lil Bow Wow singles from Limewire but many artists still aren’t satisfied with their royalty rates.
Chris Carrabba (Dashboard Confessional) stated his opinion on the matter along with other artists in an interview with Newsweek. The general consensus was that Spotify devalues music but is admittedly an incredible platform for exposure. Carrabba states, “I do not think artists are compensated fairly for streaming… streaming services provide exposure to bands, and hopefully that results in a true and deep connection to a fan base. If that occurs, then the band may be able to make a living from ticket and T-shirt sales.”
Matt Whipple (Cymbals Eat Guitars) shares the same outlook. He states, “These business models do not put these companies in a position to offer most artists anything close to fair compensation”…”We really can’t afford to pass up on any amount of exposure on the scale something like Spotify offers, even if the price we pay is the devaluation of our main project.”
The current federal law is extremely complicated and has left many artists complaining about the measly compensation offered to them by most services. Spotify’s website states that the average royalty is around $0.006 – $0.0084 per stream, but that amount isn’t even paid directly to the artist. In fact, after the 70% cut given to the master and publishing owners as well as a label, some artists only collect fifteen to twenty per cent of that initial sum.
An article from New York Times states that Apple has proposed to simplify the way in which songwriting royalties are paid. Instead of the current complex process, they’ve suggested for streaming companies to pay the artist a flat rate of 9.1 cents per 100 plays. Though Apple is yet to make a formal comment, the filing has been confirmed from a Spokeswoman at Apple. The proposal has been discussed with the Copyright Board and is said to commence from 2018 to 2022.
While this is an improvement from the perspective of the artist’s wallet, it’s important to remember how this will impact Spotify (and other streaming services like Tidal, too). Assuming this proposal passes, Spotify will no longer be able to offer its services for $10 per month. Since affordability is one of Spotify’s greatest selling points, this will have a major impact on their company and consumer base.
Spotify and other cheap streaming services have changed the way we look at music. A mere ten years ago people were paying $20 for 12 songs on a shiny disc that had to be carried around wherever you went. Now a massive 45 million Spotify customers stream online – without paying $10 for an ad-free subscription.
The music industry is in a perpetual state of change and while it’s important to be compensated fairly, sometimes you need to adapt or you’ll be left behind. For instance, most artist’s touring schedules have massively increased, considering that concert tickets, merchandise and so on have dwarfed album sales in terms of profitability.
$10 a month for unlimited music? Tell him he’s streaming!
Read more: Spotify raise $1billion to fight Apple for dominance of music streaming
Read more: Streaming services case a rise in Australian music sales
Image: Business Insider
