Music streaming services: Friend or foe to the musicians?

Who’s your favourite musician? 

Well, whosoever it might be, I don’t know, but what I actually know is that they’re likely wondering if they can keep it going through the pandemic. Singer Nadine Shah said - "Music streaming makes major labels rich, while the musicians like me go broke."

Music Streaming services aren't on the best terms with musicians, the latter often disapproving the former's policies and functioning.
For me, that’s fair. Here’s how!

I will approach this through two angles, one the concept of discovery of new artists and two the payout that artists get. 

Firstly, the majority of musicians we're talking about here aren't those who have billions of streams and millions of listeners. The majority of musicians are those who are trying to get their music out to a larger audience, trying to earn money by doing what they are passionate about and streaming services aren't really amazing for them. 

Most musicians work for years upon years trying to gain a following so that they can gain enough word of mouth to really become viral and due to the fact that only large labels actually have a voice and influence in major decisions and policies that these streaming services make, smaller artists are left out. It might still have been an effective argument if streaming services actually provided these musicians a fair shot at being discovered. But as time goes on the algorithms in these services continue to lead away from upcoming artists and more towards well-established ones. 

These algorithms either put popular music at the top or create playlists and recommendations based on our previous listening habits rather than new artists we might have enjoyed but never got the chance to listen to. These biased algorithms adversely affect the majority of music people are not listening to and expecting most musicians to be happy about this cannot be expected. 

Secondly, the payout, Spotify follows a “big pool” or “pro rata” model. Essentially, this means that it accumulates all of the distributable profits it produces each month and then divides this money according to the popularity of individual tracks and the proportion of streams that an artist received on the platform. 

So, if five Drake songs pull in two percent of all subscriber plays in December, Drake and the other people who own rights to those five tracks will receive two percent of Spotify’s user-paid money.

The thing is, the artists with huge fan bases are also part of huge labels and they rarely have the rights to their own songs. As a result, these artists get only a small fraction of the total money their songs earn which is estimated at around .004 dollars a stream on Spotify. It is not that high to begin with. 

Earlier a musician used to sell a CD which had 8-10 songs and the end user had to pay for the whole CD which ranged from Rs. 150-300. This meant increased royalty for the musicians. But, as things are getting increasingly internet based, streaming services are adopting various policies that aren’t helping musicians at all. Spotify has announced its cutting royalties in exchange for an algorithm boost and iTunes is allowing the customers to buy a song for just 99 cents. It was also in the news that the BBC Sounds app does not compensate musicians in the same way as a similar song on BBC radio would. 

Streaming companies have their valuations linked to traffic on their site or on the number of subscribers. With cutting on what one pays for music they are attracting the majority of traffic which is driving their valuations higher. However, freeware means zero revenue or miniscule for musicians. As the subscription by the customers is being reduced, the streaming services get little money and they give even less to the musicians. This way, the streaming services are able to attract more customers, but the poor musician is left with nothing. 

The majority of artists at lower or even middle rounds of the ladder, who are not signed to huge labels earn all the money through streams but they don't have a proportionate chance to gain a huge number of streams and because they are not assigned to huge labels, they also don't have the resources larger artists do. Hence, even artists with hundreds of thousands of monthly listeners end up less than satisfied with the money they earn. 

Additionally, streaming companies are sitting on a lot of user data. They use their algorithms to figure out what music people are liking. With this data they can hire mediocre songwriters, musicians or movie writers and tell them exactly what to write, which means there is no premium on creativity. This leads to the musician having negligible to no royalty. 

I won’t say things were better before Covid. At that time as well, the major labels used to earn a lot from streaming services, but the musicians could get shows because of the popularity of their songs and the tickets for these shows used to be in thousands of rupees from which they used to make money. Concerns about streaming incomes of musicians have been in talk for quite some time, but they came to the forefront as the pandemic barged in. When there are no shows being organized, musicians are forced to survive on streaming income alone. 

A singer, in an interview shared her situation saying that she had to temporarily move back in with her parents over the summer. For her, it was not the worst thing to happen, but still it wasn’t a great look for a famous, experienced pop star. Superstars and super record labels are the only ones who benefit from streaming. 

But the conclusion is far from one dimension because while musicians might not be over the moon, these streaming services are actually really good for the music industry. 

The global recorded music market grew by 7.4% in 2020, the sixth consecutive year of growth according to IFPI (International Federation of the Phonographic Industry) and streaming has been described as the engine room of growth for the industry. 

Takeaways
Streaming services are necessary evils! Artists must use them to access a growing consumer pool but they're also not satisfied. It's a catch-22 but the fact that these are necessary doesn't mean improvements can't be made. 

What's needed now is a reform that will provide today's and tomorrow's musicians everything they need to succeed. This reform is particularly needed because radio and television are morphing to streaming services. 

Firstly, it must start with us. The people! The more we are willing to give up a bit of convenience to try and listen to a variety of artists, the more these huge services will be willing to accommodate said artists. 

This, combined with a user-centric approach, an alternative model in which a consumer's money goes straight to the artist he or she listens to and not into a pool which is then distributed to different people as a percentage.

Such an approach might better connect actual listening to royalties paid where artists are compensated based on how frequently listeners stream their songs.

This will allow for more engagement of the user and better gratification of all kinds of artists.
Do you really want the talent of your favourite performers, composers to be lost out?