It’s no secret that streaming royalties for musicians are a hot mess. Musicians and songwriters are paid fractions of pennies every time their music is streamed, and the numbers only seem to be going down. This has got to change. Musicians deserve to be paid fairly for their art, and it’s time for the streaming services to start stepping up and paying their fair share. In this blog post, we will discuss why streaming royalties suck, and what can be done about it.
Why Streaming Matters
Streaming is a relatively new phenomenon in the music industry, and it has had a profound impact on the way that musicians make a living. In the past, musicians generally made their money through album sales and live performances. However, with the advent of streaming services like Spotify and Apple Music, that has changed. Now, musicians earn money based on the number of streams their songs get. This has caused a shift in the way that music is marketed and promoted. Musicians now focus on getting their songs added to popular playlists and shared by as many people as possible, in order to increase their stream count. While some people argue that this model is unfair to musicians, it is becoming an increasingly important part of the music industry. Streaming provides a new way for musicians to reach fans and generate income, and it is likely here to stay.
How Streaming Royalties Are Different
Streaming royalties are different from other royalties in a number of ways. First, they are paid on a per-stream basis, rather than a per-sale basis. This means that artists are paid a small amount each time their song is streamed, rather than when it is purchased. Second, streaming royalties are paid by the streaming service, rather than the record label. This is because the streaming service is responsible for making the artist’s music available to its users. As a result, the artist does not have to share these royalties with their label. Finally, streaming royalties are often subject to minimum guarantee arrangements. This means that the artist is guaranteed to receive a certain amount of money each month, even if their songs are not streamed very often. These minimum guarantee payments can help to offset the low per-stream rate that artists typically receive.
There is a catch with this approach though. While this varies between the different platforms, it is overall pretty much similar. The streaming platform takes all of the subscription fees being paid and pools it all together as a revenue stream. After that they have their percentage that they take out to cover operation costs as well as invest for company growth. That means an artist should be paid the rest after that right? Well, here lies the problem. Traditionally a person would by a CD from an artist and that artist would get the royalties minus of course the percentages taken by the record label and such. This money did not get shared with other artists. With streaming services, this is exactly what happens though. The pool of revenue from which artists are paid on a streaming platform is shared. So a death metal band with 1000 plays will get paid a small amount on those plays based around their number of streams based on a rate define by the streaming service around the notion that the rate is “fair.”
What Can Be Done to Improve This
Artists have traditionally earned the lion’s share of their income from sales of physical albums and digital downloads. But as those sales have declined in recent years, artists have had to increasingly rely on touring and other live performances to make ends meet. Due to the way that royalties are calculated, many artists are not being fairly compensated for their music. Royalties are based on a per-stream rate that is set by the streaming service. This rate is then divided among all of the artists whose music was streamed during that period. The problem with this system is that it does not take into account the different popularity of different artists. As a result, a small number of very popular artists receive the majority of the royalties, while less popular artists earn very little.
In order to fix this issue, we need to find a way to fairly divide the royalties among all of the artists whose music is being streamed. One potential solution is to base royalties on a percentage of total streaming revenue, rather than on a per-stream basis. This would ensure that all artists receive a fair share of the royalties, regardless of their popularity. Another solution is to allow artists to set their own royalty rates. This would give each artist more control over how much they earn from streaming, and it would create a more sustainable model for smaller and less popular artists. Improving streaming royalties for artists would not only be good for artists, but it would also be good for streaming services themselves. By fairly compensating artists for their work, streaming services would encourage more people to use their platforms and would ultimately lead to more revenue for everyone involved.