While the music industry is a lucrative one for the biggest artists that have achieved worldwide fame, those who are not so popular or well-known struggle to make their living in today's digital age. Profits aren't easy to make, and music streaming services like Apple Music and Spotify may be convenient for music lovers, but for artists, the lack of money that they receive can be a serious issue.
Musicians deserve to be paid well for the music they produce, so it comes as no surprise that there have been calls in recent years for streaming service providers to act in the same way as record labels. These days, there are countless listeners visiting popular streaming services and enjoying music which Is subscription based or advert-supported. The average listener has been shown to listen to around 32 hours of music every week, and those figures are rising, so it only makes sense to take a closer look at how musicians can see a boost to their profits.
The amount that can be earned from streaming music varies dramatically depending on how well- known and popular the artist is. Taylor Swift, for example, was rumoured to have earned as much as $390,000 when "Shake It Off" was streamed 46.3 million times. However, in the case of artists who are less well known, the sums are considerably lower. According to one calculation, a million plays of a single track on Spotify for a new artist will equate to about $7000, while the same number of plays on Pandora will only generate around $1,650. These are pretty paltry sums.
In the days when people purchased albums and MP3s, musicians had the possibility of making decent profits on their music sales. However, these days, streaming has meant that artists are pretty much giving their music away.
Apple Music, Spotify and all the other services which offer music streaming should raise their rates so artists could make a decent living from their talent. However, the problem remains that the business model of streaming is not a profitable one. Spotify is growing at a rate of 40% per year, and yet is still failing to make a profit. Therefore, paying musicians more is just not an option.
However, there is another possibility which may be worth considering. Music streaming services could consider becoming record labels. They could then take up to 70% of the artist's royalties, emulating the Netflix model. Netflix began life as a service for DVD rentals, and is now a content originator, having won a number of Emmy awards.
Back in the days when Spotify was new, it sought investment from big-name record labels. Today, it is a huge organisation, and therefore could replace those labels. Spotify demands content while artists demand distribution. In the old days, record labels would provide that distribution, however since there are virtually no record stores today, songwriters and musicians have to look to music streaming services to get promoted and listed.
Why should artists give up 70% to their record label? If the new model was adopted, the music
streaming service would be owners of part of the musician's intellectual property. This means that
there would be no need to pay a third-party label. In return, the streaming service would be able to
offer a cash advance to the artist, allowing musicians to make an instant income from their music-
One example of this in practice is Chance the Rapper, who was paid by Apple Music in the sum of $500,000 in exchange for a 2-week music exclusive. This is just the tip of the potential iceberg. Streaming services have the ability to do exactly the same for many other musicians - paying them in advance to produce new music and to work on new projects.
This power lies squarely in the hands of today's music streaming giants. They could then share the profits with the artists whose work they use. Both could then make a decent profit. It's certainly something that sounds like a positive step in the right direction both for streaming services and musicians.
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