Is online streaming beneficial for the actual artist?

For many artistes, signing up for online streaming seems logical at first; however, the financial reality tells a different story. PHOTO | COURTESY

Summary

  • The outbreak of the pandemic strained revenue streams, leading to artists relying more on digital streams for income, an unsuitable business model for them

Music has always maintained a special connection with mankind and humanity itself.

Throughout our history, music has been an ever-present feature in our day-to-day lives.

From slaves singing songs of freedom to joyful and triumphant psalms and chants of worship, we have always relied on the power of music to bring us closer together.

This sentiment is widely shared by people worldwide, often in heated debates over what constitutes ‘real music’ or which genre and era(s) had the best music, or which superstar commanded the stage with the most flair.

This is all to say that the concept of music is ubiquitous - and always has been.

Now, with that being said, it is important to dissect the manner in which modern music is being dispensed.

I recently had the pleasure of conversing with Jay Savage - a seasoned professional in the music industry.

He has worked as a music publisher and consultant, among other professions, within the industry and so he was well placed to break the situation down for me.

Our conversation covered a wide range of topics, from social and cultural, to financial.

Among these subjects was the very real threat that musicians face within current dynamics.

Modern streaming platforms such as iTunes, Apple Music, Tidal, Deezer and Spotify offer both musicians and listeners a myriad of new opportunities.

Never has it been easier to access music from across the world. Nor has it ever been easier to upload one’s own music to reach the global market.

This certainly signifies a positive shift in the distribution of music.

Though, with these new perks, come severe downsides that have allowed greed and consolidation to manifest and fester.

With the recent onset of covid-19, the landscape has become even more dire for musicians.

Live shows and tours have, over time, played a prominent role in the sustenance of professional musicians.

Artists relied on live shows and tours to generate income prior to the pandemic. They now have to find other means such as online streaming which do not really favour them. PHOTO | FILE


The outbreak of the pandemic strained this revenue stream, leading to artists relying more and more on digital streams for income.

For most, such a lifestyle is unsustainable, while few international superstars tend to hold a monopoly on the game and gains.

Upon a quick glance, here are some of the benefits of modern streaming - at least on the part of musicians. This is how the whole idea is sold to starry-eyed artists:

1. You are able to release your music to the world quickly

2. Get your music into as many ears as possible

3. Boost your profile to (potential) fans worldwide

4. Gain some credibility (Wow! My music is right alongside superstars like Taylor Swift & Kanye West)

5. Keep the rights to your own music

6. Get paid for your work

7. Acquire thorough statistics to measure your progress

8. Not forgetting, something vague regarding planning for the future.


Streaming policies

Spotify offers artists USD0.003 to USD0.0084 per stream, with an average pay out of USD0.004 per stream.

In essence, an artist would have to reach 250 listeners to earn at least a dollar.

There are indeed a lot of factors that determine how much an artist will receive from Spotify.

These include where the listeners live, if they have premium accounts or what type of distribution contract(s) the musician has.

An example of how such a policy is implemented lays in South Korea. Spotify in South Korea offers artists USD0.017 per stream.

This discrepancy stems from the fact that Spotify launched in South Korea without a free tier - meaning that all users were paying for their services.

Of course, for free users, they too become the product for sale, more so than the music.

Free users on platforms such as Spotify are subjected to regular advertisement as they shuffle through their playlists.

This allows the streaming companies to maintain revenue streams while allowing users to listen to music for free - with the slight annoyance of ads running in between songs.

The emphasis here is being placed on Spotify due to the fact that the company controls roughly one third of the streaming market share.

The money being funnelled in and out of the platform does not necessarily go to the artist in question.

More often than not, the proceeds are broken down and divided: a record label and a manager or agent will more than likely take a huge chunk of the profits, with very little left to the artist.

Much has been said and contested with regard to how Spotify pays for royalties.

Currently, Spotify fields north of 75 million users worldwide, with roughly 20 million of those users having a premium account.

The over-abundance of free users as opposed to premium users dilutes the royalties rate per stream for the average artist.

There is a growing movement that demands more equitable pay and treatment for artists seeking to make a living in this new reality of streaming, though it seems to be an uphill battle.

About 70 percent of all money received by Spotify goes to the right holders.

In other words, most of the money one might put into listening to their favourite artist will go to the record label, then the distributor, before eventually trickling down to the artist.

This too leads to a further disadvantage faced by up-and-coming artists.

The system is designed to account for the share of one artist within the sum of streams.

Spotify will take all the money it has generated from listeners and dole out by the total share of streams received by an artist.

If Rihanna receives 4 percent of all streams, then 4 percent of all money goes to her.

At the turn of the century, the tide turned with regard to music consumption.

Companies such as Napster allowed millions of music listeners to download their favourite songs at no cost at all.

This trend had the potential to cripple the music industry as a whole.

Now, although listeners have a variety of options at their fingertips and can download music legally, billions of dollars have been lost from the industry, with the artists feeling the brunt of the effects.

As somewhat of a musician myself, I can’t help but be invested in this plight.

Some of the most incredible music I have heard has come from artists unknown to the greater world.

Artists who boast tens of thousands of streams but cannot dare rely on music for sustenance. There remains the question of how best to remedy the situation.

Jay Savage’s take was condemnatory of the incentive structures within the music industry.

He described these platforms as exploitative and mere digital companies that are incentivised to maximise profits, as opposed to music distribution companies that fairly distribute music to a global audience.

A biting example that Jay made was the apartheid-era South Africa - where miners would dig for gold and see very little of the share in proceeds, essentially handing their gains back to the state.

I took the liberty to ask him if the incentive structures were always corrupted from the inception of these streaming sites, or if there ever was an opportunity for there to be a fair share of revenue that did not break the backs of musicians.

His take on it was somewhat pessimistic, relaying that there were greater forces at work within the new global monoliths.

The rise of tech companies over the past couple of decades have shaped our modern reality.

Technology giants such as Facebook and Twitter have become so powerful as not to be accountable to any sovereign state laws, leaving the governance of such entities to the oligarch billionaires in control of them.

This monopolisation of industry has spread fast and wide, incorporating our day-to-day lives. Music, therefore is no exception to the rule.

With these modern conveniences afforded to us, come steep costs that are paid every day.

There have been growing protests and calls for a more just system for artists with ‘penny per stream’ being the leading chant.

Apple Music has taken the stage to brag that they offer their artists one penny per stream, which a growing number of advocates seem to believe represents a fair distribution.

However, Spotify has reacted to this growing movement in the same ‘let them eat cake’ manner that can be expected from such a company.

An executive at Spotify labelled these artists demanding a simple penny per stream as ‘entitled.’

That sentiment is widespread within the upper echelons of the industry, so it is to be expected.

MAhatma, a local, up and coming artist. PHOTO | COURTESY


The way forward?

“What would be your solution going forward?” I asked Jay

“People need to think about it differently. The task is in trying to spread the word about an issue that is very hard to argue,” he said.

The simple fact is that a lot of these issues raised could be fixed with simple legislation.

This, however, is a tall order as money often speaks loudest - and those with the most money, are not likely to give up a penny without a fight.

So that’s where we’re at currently. For most of us, these issues are inconsequential.

More people enjoy listening to music than those who make music professionally. S

o a lot of the issues raised will not be felt or strike a cord with the vast majority of people.

That being said, there has to a reckoning of sorts with regards to digital rights for artists if the purity of music is to persevere.

Music has been devalued, but that’s okay.

That’s for each of us to workout in our own relationship with music.

There can be legislative intervention. People can get involved at no risk because we are no longer in the boycott era.

We are in the era of making our voices heard. It is only an issue if we make it an issue.

Much like any legislative movement, it takes a concerted protest, one with clear demands and a call to action.


By Mahatma Ulimwengu