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How Musicians Are Fighting for Streaming Pay During the Pandemic.

By Andy Cush

With concerts on hold, it’s abundantly clear that most musicians can’t live off streaming income alone. How could the system be fixed?

Indie rockers Stolen Jars are not exactly Coldplay or U2, but they’re not a garage band either. They tour regularly and have been covered by NPR and The New York Times. They have a fanbase. They’ve placed one of their off-kilter songs in an iPad commercial. They currently have more than 22,000 monthly listeners on Spotify. Bandleader Cody Fitzgerald estimates he makes about $1,500 to $2,000 every year from streaming services, which is good for about a month’s rent on his New York apartment.

That annual streaming income, Fitzgerald is quick to note, is quite high for bands of Stolen Jars’ stature. “Most people are on labels, which means they get, at most, 50 percent of that,” he says. Fitzgerald self-releases Stolen Jars’ albums. He is also the band’s primary songwriter and performs many of the instruments on the recordings himself, all of which entitles him to an unusually large share of the total payments from services like Spotify and Apple Music.

Musicians with different label and publishing situations—even those whose music is more popular—may make significantly less. Tasmin Little, a celebrated classical violinist based in the UK, has received honors including a Classic BRIT award and an Order of the British Empire designation from Queen Elizabeth. She has more than 600,000 monthly listeners on Spotify, and her recordings are featured on popular playlists like Classical Essentials, which has 1.9 million followers. Little tweeted last month that she was recently paid £12.34, or around $15.50, for six months of streaming on Spotify, a period in which she would have had over 3.5 million total streams, according to her current statistics.

When the coronavirus pandemic shut down the possibility of touring for the foreseeable future, cash-strapped musicians lost their most reliable way to make money. Revenue from streaming has always been small for many indie musicians, but now it is one of the few income sources available, along with sales of merch, physical records, and downloads on Bandcamp. According to artists, the pandemic is only exacerbating the inequities of a system that is rigged against the people who make it run. Under these dire circumstances, musicians are organizing through unions and other advocacy groups to fight for larger payments from streaming platforms.

One such group is the Union of Musicians and Allied Workers (UMAW), a new organization that counts Fitzgerald as a member of its steering committee, alongside members of bands like Speedy Ortiz and Downtown Boys. Another is the Keep Music Alive alliance, a partnership between the UK’s Musicians Union and songwriters association the Ivors Academy, which joined forces after the pandemic’s onset, aiming to remedy the “woefully insufficient” payments made from streaming services, according to a mission statement. These organizations differ in approach, location, and scale—the Musicians’ Union was formed in the 19th century and represents 30,000 people; UMAW was formed in May and its current membership numbers in the hundreds—but both are responding to the same crisis.

“I don’t have any friends who don’t have some kind of financial worries right now,” says Sadie Dupuis, UMAW founding member and guitarist-songwriter of Speedy Ortiz. “For most musicians I know who are touring full-time, the work they have outside of that is all based in the service industry, and they can’t get back into that either.” According to Mark Taylor, communications director of the Ivors Academy, the situation represents nothing less than an existential crisis over the future of music itself. “We really just want to keep music alive,” he says. “It’s good for us, it’s good for our souls, it’s good for the economy, it’s good for culture.”

In the UK, the Keep Music Alive campaign is pushing for a government review of the streaming industry, which it hopes will result in additional regulations over the way payments are doled out. The UMAW, as a new organization aimed at a host of issues including streaming, has not yet formalized a set of demands for changes. Both groups acknowledge that the process of fixing streaming will be as complicated as the recognition of its brokenness is simple.How do streaming payments work?

Artists receive, on average, a small fraction of a cent for each time one of their songs is streamed on a major platform. A seemingly obvious fix would be for the platforms to simply increase this number. But while these tiny per-stream payments are a useful concept for identifying the problem, they’re not particularly useful for solving it, because they don’t reflect the mechanism by which the platforms actually distribute money.

According to a detailed survey of streaming payments by the music industry analytics company Soundcharts, streaming platforms pay out roughly 60 to 70 percent of their annual revenue to “rightsholders,” a group that includes musicians, record labels, songwriters, publishers—anyone who has a financial stake in the sales of a given record. Spotify, the most popular platform in the U.S. and globally, projected a total revenue between roughly $9 and $9.5 billion for 2020 in a recent letter to shareholders, which would make the total rightsholders’ take something like $6 billion for this year. That huge pile of money is then divvied up to artists (and their associated labels and so on) according to their stream counts as a fraction of the total streams on the platform for a given period. A single stream does not entitle a musician to a payment of some fixed amount; it entitles them to a slightly larger piece of the total rightsholders’ pie.

To understand why per-stream payments can be an unrepresentative metric, imagine no one streamed anything on Spotify for all of 2020, except for a single person who played, say, 100 gecs’ “Money Machine” a single time. As long as those hypothetical non-listeners didn’t cancel their subscriptions, and money kept rolling in to Spotify, that one play could earn 100 gecs millions of dollars, because it would entitle them to the whole pie.

Soundcharts offers another way of looking at it. Each time Spotify introduces a new feature aimed at keeping people listening for longer, like autoplaying similar artists after you finish an album, it sends the average per-stream figure down. That’s not because Spotify is suddenly skimping on payments, but because people are streaming more songs—and when people stream more songs, a single stream is equivalent to a smaller pie slice. That’s fine for established artists whose music is regularly recommended by these listener-retention features, because the dilution in value of a single stream is offset by an increase in streams. But for artists who aren’t being recommended, it means their streams are worth less.How could platforms make payments bigger?

Though making streaming services work better for musicians is not as straightforward as demanding a higher payment per stream, there are several ways the system could theoretically be changed to get more money into artists’ pockets. Most obviously, companies like Spotify could increase the 60 to 70 percent share of their revenue that they pay out to rightsholders.

But if recent history is any indication, that number is likely to go down before it goes up. Spotify renegotiated its deals with labels in 2017; before that, the payout number was more like 80 percent. At the time, the labels agreed to have their payments cut—thereby reducing musicians’ payments as well—because they believed they needed Spotify in order to ensure their own survival. With streaming accounting for an ever-increasing majority share of the recording industry’s revenue each year, the labels probably won’t be changing their minds about that anytime soon.

But even if Spotify and the labels reverted back to the old deals, it doesn’t seem like it would do much for the average musician; it’s not as though indie bands were rolling in dough from streaming back in 2015. Groups advocating for bigger streaming payments could demand that Spotify give up an even larger revenue share—90 percent, say—but it’s hard to imagine Spotify would agree to it. Even the labels, who would have to sign off on such a deal and would be its chief beneficiaries, seem more inclined to accept Spotify’s word that they’re better off making less money so that Spotify can thrive.

Another option would be to advocate for the platforms to increase their subscription price. Higher monthly fees means more revenue; more revenue increases the size of the overall pie given out to rightsholders; a bigger pie means bigger slices for all musicians. But while most music fans likely agree that artists deserve more money, asking listeners to pay up themselves is trickier. “It’s interesting, the price of a subscription has stayed static for a number of years,” says Taylor of the Keep Music Alive alliance. “But frankly, given where we are economically right now, and pressure on peoples’ wallets, that’s probably not the route to go down as a campaign.”

Instead, Keep Music Alive advocates for overhauling the payment system entirely, toward what’s known as a user-centric model, which would apportion the subscription fee from each user to the artists they actually listened to that month. If I only listen to 100 gecs, my $9.99—minus Spotify’s take—goes directly to 100 gecs and their label.

The current system, known as pro rata, gives more financial weight to the preferences of users who stream more songs, whereas user-centric payments would treat the preferences of all users equally. Taylor says the user-centric model is a better reflection of how listeners interact with the artists they love outside of the streaming realm: “We choose to go to gigs, to buy merchandise, and part of that exchange is, ‘I want my money to go to this artist, so they can make a living, and do more of what they do.’ That is a very distinct relationship that currently doesn’t work, really, in streaming.”

A user-centric model is appealing in the abstract, and there is reason to believe it could financially benefit some smaller artists in the long run. According to a 2017 study by the Finnish Music Publishers Association, 10 percent of all streaming revenue flows to the top .4 percent of artists under the pro rata system. The study found that a user-centric system would cut the revenue to that top tier nearly in half and increase the overall flow of money to less popular artists. However, some individual small artists ended up receiving less money under a user-centric system in the study’s simulation. The French streaming platform Deezer announced a switch to user-centric payments last year, but for now there is little real-world data showing its effects one way or the other.What about labels?

Streaming platforms do not make payments directly to musicians, but rather to labels, distributors, publishers, and copyright collection societies, all of whom take their own cuts before passing the money along. The share of revenue that ends up in a performing artist’s pocket also depends on factors that have more to do with these other parties than the streaming services themselves: chiefly, whether the artists are performing their own compositions or someone else’s, and the size of the splits they’ve negotiated with their label over revenue from their recordings. These factors may help explain why a songwriter with no label like Stolen Jars’ Cody Fitzgerald makes more money from streaming than a signed artist who mostly performs works by other composers like Tasmin Little, despite the greater popularity of Little’s recordings.

The label’s cut of an artist’s streaming revenue varies from artist to artist and label to label, and the contracts that govern it aren’t generally made public. But several experts estimate that labels get anywhere from 50 to 85 percent. Fifty-fifty splits are common to indie labels; majors generally take a larger share.

The Keep Music Alive campaign broadly presents itself as a critique of the streaming industry, but its specific platform focuses equally on the role of labels. According to Taylor, the 85 percent a major label might take from an artist’s revenue is no longer justified in the streaming era. “A lot of that is a hangup from when they had larger overheads, from when they had to store and ship CDs,” he says. “There was a cost to all of that, which is now largely being reduced. We’re basing this new system on outdated models.”What’s next?

For musicians facing an undeniably appealing and increasingly dominant technology that threatens to usurp their livelihood, resistance can seem futile. It would be foolish to pretend that streaming isn’t an amazing service from a listener’s perspective, or that it will go away just because it doesn’t seem fair. Talk to enough musicians and you’ll find plenty who are vocal critics of streaming, but still host their albums on streaming services and are subscribers themselves.

“It would be great to strike a new balance, because these streaming services are really helpful in terms of music discovery—I buy more records than I used to, because I can get psyched up on something new without having to go to the listening station at the Virgin Megastore,” says Dupuis. “But the discrepancy between what mega-corporations are pulling in off artists’ music and what we’re pulling in is pretty gross.”

An individual musician who’s inclined to protest that discrepancy has limited options. They could pull their catalog from the platforms, but that seems doomed to fail as anything other than an act of symbolism.“Unless there’s a big collective action to do that, that will not do anything,” Fitzgerald says. “If you do it by yourself, it will just make it so you can’t grow your fanbase, so you can’t be a band.”

Spotify’s problems with paying musicians may be inextricable from its value proposition to subscribers: $9.99 per month is an incredibly small price to pay for push-button access to nearly the entire history of recorded music. Practically every musician on Earth is vying for their piece of the pie, and there just may not be enough to go around. Spotify understandably wants to make money, and probably deserves something for its development of the technology itself. But even if it conceded to pay 100 percent of its revenue to rightsholders, and somehow managed to continue operating, the payouts under the current system would still be paltry for many musicians. Take Tasmin Little’s $15.50 for six months of streaming. Multiply that by 10—a factor which would far exceed Spotify’s total revenue if it were applied to its entire catalog—and it’s still only $155.

Recognizing the futility of the situation doesn’t inure musicians to its indignities, which have continued rolling in as the pandemic pause stretches into an epoch of its own. First, there was the virtual “tip jar” that Spotify rolled out as an optional add-on to artist pages, which allowed listeners to donate money to musicians directly—an apparently well-intentioned gesture that nonetheless served as a tacit admission that streaming revenue could never keep most artists afloat on its own, even as Spotify subscriptions and revenue surged during the early weeks of the outbreak.

Then, there was the news that Spotify had paid the wildly popular podcaster Joe Rogan over $100 million for exclusive rights to his show, the latest indicator of a larger priority shift toward podcasts for the company. Ted Gioia, a music historian and jazz pianist, summed up musicians’ frustrations with a tweet: “A musician would need to generate 23 billion streams on Spotify to earn what they’re paying Joe Rogan for his podcast rights… In other words, Spotify values Rogan more than any musician in the history of the world. Sound fair to you?”

I emailed Gioia, who has written a celebrated book on music’s power to subvert existing orders, to ask if there’s any way that musicians, and the listeners who love them, can change the streaming system for the better. In a thoughtful and lengthy response, he chastised the record industry for failing to keep up with technological innovations on its own, allowing tech companies like Spotify to swoop in and set the negotiating terms. He pointed out that individual musicians have little to no leverage in their dealings with streaming platforms, despite the fact that their music makes those platforms run. He called the prospect of convincing platforms to pay musicians more a “pipe dream.”

Despite all this, he ended his message with a faint note of hope. One way to fix things, he wrote, “would involve musicians taking control of their own destiny,” and walking away from streaming en masse to start something new. “Make no mistake, musicians could run their own streaming and distribution platforms, and reallocate the cash toward the people who create the songs,” he continued. “No, I don’t expect any of these things to happen. I’m just saying they could happen.”

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