MPs to investigate whether artists are paid fairly for streaming music

[Drew Stephenson]

You're assuming this is a choice I can make on my own. Not so.

I'm not being facetious here, genuine question, but why can't you make the choice?

Most music I make is with other artists (I'm not the 'name') and these decisions are taken by them and their labels.

Ah yes, of course.
Sorry, you're always a musician first to me Paul!

[Drew Stephenson]

Be careful what you wish for - 50/50 is actually worse than the 65/35 that Spotify currently pays according to

https://musically.com/2020/05/05/spotif ... about-how/

I was just about to go and see if I could find this out. When I signed my brief recording deal I was on a 50/50 cut but I'm conscious that was very unusual.

I don't think Spotify will ever make the amount of revenue they'd need to pay artists better.

I'm not sure what the ratio of subscribers to free users is, but it's heavily in favour of the free users of course. And I can't see that Spotify generates a huge amount in advertising either - whenever I use it, there's still an awful lot of "Hey, Spotify is awesome, come sign up" or "Check out this cool playlist"-type ads, which I'm sure they'd rather replace with larger, more hi-profile paid ad campaigns than just fill up spots with their in-house stuff. That's not a good sign for how in-demand their ad spots are, or how well they're selling...

It's difficult to hope more people will sign up to paid subscriptions when kids are all just watching their artists on YouTube and are perfectly happy with it...

Add that to how young people listen to music now (30 secs, skip, 30 secs, skip etc) and you do wonder how you can monetise that.
None of which is going to be solved by some posing MPs in London. Washington maybe, California or Sweden even, perhaps, but London? It's just trying to get some column inches to be seen to be 'doing something' for the arts.

[Martin Walker]

You asked what would be 'fair' - I said 50/50. If that amounts to peanuts then so be it, but at least it would be fair peanuts. At the moment I'm having my pockets picked and everyone around is smiling and seemingly justifying it!

Well said Paul!

I refuse to join/use Spotify or any other paid streaming service on moral grounds., because basically I consider them rip-off merchants. Even though I'm on Amazon Prime, I have never streamed a single one of the millions of mainstream tracks they offer me free of charge as part of my membership.

That probably sound silly and pointless to some people, but I firmly believe that rampant streaming is slowly but surely killing off music, which is why I spend so much on Bandcamp purchases to directly support musicians whose output I enjoy.

I applaud Drew for putting together such cogent arguments, but for me streaming remains a gut feeling of distrust against a corrupt system.

I must have got out of the wrong side of the bed today

Martin

[Drew Stephenson]

It's a difficult one, especially given the link that James posted above (which is one of the best I've seen actually - good find!)
Do we want a fairer music business? I suspect we'd all answer yes.
But how many businesses are effective on the basis of 'fairness'?
Actually there are a few you can pick out, but they're generally outlier examples - not because they have to be, but because investors and stock markets are nervous, panicky things that don't trust what they don't understand.
We've spent so long working up a system that works on the meanest of principles that it struggles with the idea that a lot of people would actually support something better.
It's especially difficult for any kind of new entrant to a market to work like this as they need the funding which comes from the existing structures and mechanisms.
But we've seen what happens when we try not making the product available to the customer in a format and price that they're comfortable with.

[muzines]

for me streaming remains a gut feeling of distrust against a corrupt system.

I know these are not simplistic arguments, but who do you guys see as the responsible parties for this current state of affairs:-

- The tech companies for seizing an opportunity to build and develop streaming platforms for a clear market
- The tech companies being too greedy (either not paying back enough, or not charging enough to the end user to build market share etc)
- The labels for licensing their artists' music for cheap to such platforms knowing that returns are poor compared to the old model
- The labels for licensing their artists' music to such platforms but not passing enough of those revenues on to the artists
- The labels for generally not being "fair" to their artists and exploiting them anyway they can
- The market for not wanting to buy (and re-buy) CD's at £10-20 a pop any more
- The market not valuing music as being something that needs to be paid for, or owned
- The high availability of "free" music (in the old days of course, we still had "free" music, because of radio - the difference being, although the end user didn't see the costs, the radio stations *were* paying to play that music.)

(Of course, all of these things, and others, are factors to varying degrees).

I mean, no matter whether we're talking old-model or today's state of affairs, the details of what "fair" would be, in relation to labels and artists, would seem to differ significantly depending on which side of that relationship you're talking to. It just seems to me that when there was coke+lamborghini money floating around, there was enough for everyone (at least "successful" artists) and those people didn't question too hard (until their managers abscond with all the money!). Others were willing to slum for nothing it in the hope of reaching those heights one day.

Now the coke and lambo money of the 80s & 90s is long gone, everyone's having to scramble much harder to survive. As was always the case, the people at the top do well, people who *should* do well manage to scrape by, and everyone else struggles - much as it has always been. At least there are other avenues where artists can reach their audiences, and generate revenue (let's leave the current state of the live situation due to CO19 out of this for now...)

How do we get to a music model that works for everyone - because we've never had that before, either...

Should the vast majority of artists skip the labels entirely (or at least while it makes sense) and go to their audience directly? Do they even need marketing muscle when the power of crowdsourcing and sharing can build and fuel your reach? Is making a good living from art something that should be available to everybody, or has it always been hard to do?

[CS70]

Lamb is a relatively expensive meat to buy, but that's not reflected in the price a farmer receives at market for a lamb.

That's true, but when port the analogy back to recorded music, the issue is that buyers don't particularly want it. It's like farming camel meat - your main problem as a farmer is not gonna be your percentage on the final sale price, but that too few people want to buy camel meat.

For artists who are in demand it's definitely worth looking at. But, as Drew, I suspect these aren't the ones which clamor for "fairer" conditions.

In any case, it seems to me that what's worth focusing on is very different for the "in demand" vs. the "not in much demand" categories.

If you are an artist in demand, a very interesting point is whether or not there is a difference between the money you get as an independent (i.e owning your own copyrights and basically being your own label to some degree), and the money that a a "big" label gets (what is it, Universal, Sony, Warner?). They should more or less be the same, but I suspect they aren't?

[CS70]

- The market for not wanting to buy (and re-buy) CD's at £10-20 a pop any more
- The market not valuing music as being something that needs to be paid for, or owned
- The high availability of "free" music (in the old days of course, we still had "free" music, because of radio - the difference being, although the end user didn't see the costs, the radio stations *were* paying to play that music.)

Without doubt, the last one. The actual culprit, if you want, is a political and executive environment which has allowed recorded music to be stolen without consequences.
It's like if people were going around stealing cars or stuff from shop at random and there was no response from anybody. Like in good old "jungle law" times.

Even in old days, radios were very careful to put commercials or fades well placed to reduce the amount of people lifting tracks when played (I know - my and my sister in our early teens did try!). And the quality of what you got was very far from what you could get if you bought the stuff. Not so, of course, for digital copies.

"The market" is not about the people who buy (or not) and how much they buy or not.. - it's about the rules, it's the place where things can be bought and sold, and the possibility of secure transactions.

In reality, we don't know whether or not people would want to buy music or not - because when anyone can easily take it for free, there is no market. The unfairness is simply there: recording music is not a viable trade _even if you make it big_ because your product can be had for nothing.

[Drew Stephenson]

But that's true of virtually any digital product and yet there are still plenty of people making their living like this.
It comes back to the lowest common denominator thinking. Say you make your music available on a pay what you want basis. Some people, fans, will pay your recommended amount, some, superfans, will pay more, some will pay less. Some, if you allow it, will take it for free.
But are those last ones actually lost sales or are they potential future fans? Or would they simply never have paid and therefore not listened if that was the alternative?
I think most people are better than the lowest level but they just need a prod to show that their money is going to a worthwhile cause.

[CS70]

But that's true of virtually any digital product and yet there are still plenty of people making their living like this.

It seems so at first, but there are important uniquenesses to music as digital content: it's small in size, it's a solitary experience, it's digitally safe and 90% of the product *is* the digital content.

Not so for others. For example, for software, most of the serious money has been historically made licensing to businesses - for which it is always been possible to enforce property rights and payment. And it's now made in services, where there's no sale at all. There are, of course, some open source digital products whose funding does not come from sales, but are marketing exercises from companies with sizable financial muscles, which reap their benefits in marketing terms or as control of a given standard. For consumer software, there's all kind of licensing enforcement (ilok, anyone? Windows activation?) and using cracked products comes with a risk of virus infections etc - which helps keeping the average joe away.

Games might have suffered more if they were the "old style" ones - single player, single computer installation. But 99% of the big games nowadays have an online component which is fundamental to the customers, and that means that cracked copies simply don't work where it matters. Hence gamers buy games - at quite hefty prices - and there's a flourishing indie game market (very competitive, but definitely working well).

And of course, there are the small software producers aimed mostly to the consumer market that are indeed killed by piracy.

For movies - there's two aspects: one, of course the product is more than the digital content: it's about the cinema experience and the timing. You want to see the big Star Wars movie with your children when it comes out, not three months later. Second, it's the size - movies of HD quality are massive downloads. It still happens in droves of course, but the evidence is that the effect is not as big (big movie companies keep existing and making big movies, the successful one make quite a lot of money). Sure they could do more, but it's not a market killer - you can't download cinemas (or gadgets or merchandise).

Similar arguments can be done for most digital content which is not music like. Just like shoplifting, a degree of stealing always exists and is physiological. It's the free for all that makes a market impossible.

[Drew Stephenson]

The parallel that sprang to my mind as i wrote was with comics and cartoons.

EDIT: But all of this is getting away from the thrust of the thread.

[James Perrett]

While we may hark back to the old days, it is worth thinking about how many artists actually recouped their advances from the labels. As I understand it, very few ever did but it was the tiny number who were extremely successful who subsidised most of the others. Does streaming allow the same cross subsidies to exist?

[Drew Stephenson]

That is a very good question. Especially coupled with the absence of the front-loading effect of hard copy sales that Hugh talked about earlier.

On the positive side, overall music industry revenue is back up to 2004 levels.
I know that going back 16 years isn't normally a positive but it is part of a steady growth.

[RichardT]

While we may hark back to the old days, it is worth thinking about how many artists actually recouped their advances from the labels. As I understand it, very few ever did but it was the tiny number who were extremely successful who subsidised most of the others. Does streaming allow the same cross subsidies to exist?

For labels with top artists, I guess opportunities for cross-subsidy do exist. But an increasing number of artists at the lower or even middle tier of sales are not bothering with labels at all. So they are on their own - but they have the freedom to do what they want to do.

[CS70]

While we may hark back to the old days, it is worth thinking about how many artists actually recouped their advances from the labels.

Few, and very slowly, from what I read. With labels using all sort of tricks to get much more than the percentage apparently agreed (including fees and additional cuts which were justified maybe in the 50s but still well in use in the 2000s).

As I understand it, very few ever did but it was the tiny number who were extremely successful who subsidised most of the others.

Yes, that's how I unerstand the model as well.

Does streaming allow the same cross subsidies to exist?

In a sense, yes - Spotify pays a huge share to successful artists' labels, and they potentially can invest them in new acts.

In practice they do very little if any "new acts": the internet means also that most artists need to build their own following before getting on any serious label's radar. Playing it safe is the rule and A&R is almost inexistent, from what I see. New acts are usually not very new - they are already locally successful. It may still happen, but usually as a consequence of a producer or other actor "in then know".

What labels do is to try to take an already locally successful act and bring it into a national or international dimension. Recording costs have become much smaller, but the marketing investment for doing that is as significant as it's always been, and I guess label use some of the revenues they get from already successful acts to that purpose.

On the other side, the accounting method of Spotify is skewed to favor the bigger artists (don't recall the details at the moment, can probably find out) at the expense of the smaller ones, so small acts (or small labels) maybe lose more than they used to do with mortar and brick shops (but I am not sure, I haven't looked at that aspect of the "old" model).

[BigRedX]

I've just been through my CD Baby statements for the various streaming services and going back over the last 12 months for a single track (my "best selling" one) of 2' 59" duration the payments appear vary from $0.001 to $0.01 per stream. I'm assuming that this is before CD Baby take their 9% cut? This track only gets a handful of plays per week split across all the various services, so I don't make very much, but if the band were more popular I would suspect that it would add up to be a "nice little earner".

Therefore I can only assume that if your music is popular and you still aren't making a lot from streaming, then someone else is taking the lion's share of the revenue, probably the record company. Therefore the problem isn't the streaming services themselves, but with all the "middlemen" taking their cut of the revenue stream before it reaches the people who actually produced the music in the first place. How "fair" this is will very much depend on when you signed your recording contract. I can understand those who are bound by deals made before the rise of the internet and streaming services for music consumption being more than a little upset, as it is unlikely that 10 years ago many would have predicted that this would be the way that the majority of listeners would consume music. However if I did have a recording contract from back then I would be looking very closely at the small print for how income from hitherto unknown revenue streams would be divided between the record company and the artist. And AFAIAC, anyone signing a recording contract in the past 5 years only has themselves and their legal advice to blame, if they consider the split to be less than fair.

IIRC none of the streaming services on their own turn a profit. Amazon and AppleMusic are supported by their parent companies, Spotify has been artificially propped up by investment capital and an over-inflated IPO, with investors hoping that in the long term the company will somehow figure out how to make money from advertising and the subscription services. So from that angle my average of $0.005 per stream looks like being pretty good value for money.

In the end the problem is going to be the age-old one of record companies being seen as unfairly exploiting musicians, although how true that is these days is probably the subject for a separate thread.

[DC-Choppah]

- The value proposition of the internet media companies (You Tube, etc) has always been to give people access to copyrighted music for a fraction of the alternative cost. That value attracts people, and while they are there, you sell them advertising. Same business model as a stolen goods salesman charging a small fee to give people access to a pile of stolen property.

- The copyrights for music were not enforced, so the product has been devalued. This can come back (and is coming back).

- A stream is the same as a download. To say otherwise is to deny reality. The penny rate should be the same. Ownership is access. 24 Hr access to a song is ownership. It is up to the distributor to keep track of who has or has not paid for their copy.

- The cost of the enforcement of copyright is a business expense for the digital music providers and must be born by them.

- Internet digital music providers are distributors.

[Drew Stephenson]

A stream is the same as a download.

Must we go through this again?
The other points are debatable (as we've shown previously) but this is just factually wrong.

[CS70]

A stream is the same as a download.

Must we go through this again?
The other points are debatable (as we've shown previously) but this is just factually wrong.

I think the "ownership is access" point is quite a good explanation of what DC means?

It seems a bit of a syntactic distinction only. For example, technically you don't own any software (they're all just licensed to you) but in practice most people using Word or Cubase etc would say they own it?

If I can stream a song anytime I want, it's the same as owning it, isn't it? The only difference is that the license is not perpetual... but then also a CD is not really perpetual, because at a certain moment it will not play anymore..

[muzines]

If I can stream a song anytime I want, it's the same as owning it, isn't it?

I don't think so. If I *own* something (say, a CD), I'm free to do what I choose (within reason) with that thing - consume it how I choose, lend it to friends, sell it etc. If I choose to keep it for my lifetime, if I'm responsible and look after it, I'll always have access to it and be able to enjoy it.

But streaming services (and indirectly, labels) still very much control that relationship to that media. It can be withdrawn/removed at any time, outside of my control. The agreement terms can change at any time. My account can be revoked at any time. The payment terms may change requiring me to pay additional money to access the content that I already previously had access to for free. Advertising may be inserted into that content. Etc etc.

The bottom line is that ownership comes down to control, and for media I own, *I'm* in control, and for streaming media - who knows who's in control, it probably changes month by month - but it's certainly not me.

Anyway, forgetting any legal distinctions for now, one of the key main difference to me between my own library of music I've bought, versus having a streaming account and being able to listen to anything, is that *I can rely on the music I have bought to be there* - I will never have content I own removed from my library by another company, or have the terms of use change at a corporate whim, and I will never have to pay additional money to continue to access my content.

I know this has bitten people who have, in one example, bought Disney movies on iTunes and when the legal agreements didn't work out Disney pulled all it's movies, so people's iTunes accounts which previously had Disney movies they'd paid for now had all their movies removed...

So no, I do not at all equate access to ownership. To very different words, with very different meanings. I mean, I have *access* to all the world's websites...

[Drew Stephenson]

What Desmond said. ^^^

In practical terms, if I go on a long car journey I can plug in my phone and play the downloaded songs from the memory. Reliably, consistently. Likewise when I get back on my daily commute, or if I go away for a weekend somewhere remote.
I can't do that with a stream.

Similarly content that I've 'bought' on Netflix or Prime occasionally disappears because there's a licensing squabble between providers and 'my' content is no longer available.
That doesn't happen if I've got a download rather than a stream.

So it's not just semantics, there are real, practical consequences. So they are different things and conflating them just muddies the water for everyone.