Streaming Music And Musician Royalties

In the news today is a story about Jimmy Buffett taking the stand at the inaugural Vanity Fair New Establishment Summit. Daniel Ek, the founder of Spotify, one of the internet’s leading music streaming services, was speaking. Buffett wanted to know if his royalties were going to go up anytime soon.

Ek said no.

Buffett argued, and it was a good and legit argument, that newer musicians aren’t making enough from the service to play their music, and that’s one of the reasons they’re struggling.

The argument goes further than that. Of all the money that Spotify makes, most of it, up to $1 billion, will go to the rights holders to the music. 70% in fact, will go to those holders. If a newer musician is tied to a major label, chances are very good that that label is the rights holder, not the musician. So the label is going to get a big chunk of that $1 billion, while the artist is only going to get a fraction of a cent each time one of their songs is played via the service.

Now, here’s where the issues really start to show themselves.

First of all, newer musicians have to read those contracts. Instead they’re told about all of the fame and fortune that awaits them if they just sign the contract, and how the label is going to back them 100%, and how they’re going to be huge stars. They sign, and typically are given a bonus. Let’s say $1 million.

They are expected to do things with that $1 million. Get a nice car, nice bling, nice clothes, new tattoos… and when their album comes out, the money made from that album goes back to the label, to pay back that $1 million. If that album isn’t a hit or a huge hit, and the artist doesn’t make a ton of money from it, if they actually make back that $1 million but not much more, they’re left with the not much more. Suddenly they’re struggling again.

I know from experience that the band Bare Jr, who is of course one of my favorite bands ever, still doesn’t own the rights to their own music, Sony does. If, by chance, one of their albums from way back in 1999 sells now, they might see a dollar from it. Split that 4 or 5 ways. Big payoff.

Next, while the music business is a lot different today than it was 40 or more years ago, in many ways it’s still exactly the same. The labels want money and they don’t care about the artists. Seriously. But today there are so many more avenues for artists. One of those is to do the legwork themselves. Buy a computer, put recording software on it, buy some microphones, record yourself playing your songs, make your own albums. Upload your own music to the net. Sell your own stuff. Make all of your own money.

Sure it’s work, but what the hell do you want, a free ride? The same can be said about any major art avenue. As a writer I can opt to be traditionally published, or I can go self published. Both have their ups and downs, but ultimately you’re going to have to do your own legwork if you want to succeed, no matter which way you go. So why not have complete control of your own art and make the most money for it that you can?

How did Metallica get started? They had an apartment with no furniture. They slept on the floor. They played gigs every night. They paid for some small recording studio, recorded their first album, and sold it from the trunk of their car before and after gigs. And now, they’re the number one name in metal. And they did all that before computers and the internet.

This is where the argument goes both ways. From the article I linked to above:

“But it’s actually still lower than what we used to get — right, Irving?” Buffett asked Irving Azoff, a legendary manager in the music industry, who was moderating the discussion. “That’s why I’m looking for a raise.” Azoff was unsympathetic. “Sell one of the planes,” he told Buffett.

Right there is the point. Sure new musicians shouldn’t have hundreds of millions of dollars to live with like Buffett does. So don’t go spending that money like you have it, regardless if you do or not. Buffett, for his birthdays, flies his band and their family and friends to a resort for a week or so, on his private jets, and pays for everything. I don’t know the details, but he speaks of that himself in one of his own books.

All too often, those who came from nothing and made themselves rich and famous, forget where they came from. It’s their money and they can spend it how they want, but to ask for more money just so they can spend it lavishly is sort of ironic, isn’t it? If you want to continue being rich, stop spending so much on unimportant stuff. Manage your money better, but more importantly, manage your art better. Don’t let someone (labels), who have nothing or very little to do with your success, make more money off of your art and talent than you do.

I don’t feel bad for Buffett and those artists in his position, and I do. I don’t feel bad for new acts who don’t take their own art and careers into their own hands, and I do. With so many options now for artists to get their product out there and to make their own fame and fortune, there’s no reason why you should be handing off most of your money to someone who is only using you to get that money. That’s why so many music artists start their own labels. To have more control over their own money.

Internet streaming services like Spotify are a double edged sword. On one hand, they get your music out to tons of listeners who might otherwise not know you exist. On the other hand, you’re not going to get rich JUST from Spotify. You have to hope that your music is good enough for those listeners to go out and buy your music. If not, then was your music good enough to buy? Was it good enough for you to get a raise from Spotify?

And if you want to continue living in that mansion, with a different sports car to drive every day of the month, and a different private jet to fly you around to expensive private islands once a week, don’t expect someone else to pay for it. Earn it yourself, or cut back on your spendings. Don’t forget where you came from, and don’t forget that at any moment, you could be back there. And nobody is going to care that you’re back there but you.

3 responses to “Streaming Music And Musician Royalties

  1. If record contracts give the rights to music created by the musicians to the label, then that needs to change. Recording artists should not sign contracts that give the rights to their music away. In the publishing world, that’s not the typical arrangement. There, you are typically selling the right to publish first, or for a fixed amount of time, but you retain the copyright and the true rights to what you wrote. There are exceptions, of course – some companies that print short stories do stipulate that submissions become their property, and it’s possible there are full-length book publishers that pull that scam too. But those are the exception. Most of the time, writers retain ownership of their work, and that’s how it should be with musicians too.

    But short of a change in the laws that prohibits that kind of contract, the only way it’s going to change is if musicians stop signing contracts that give ownership of their creations to the music label. That may mean passing up a chance at their big break, but artists need to believe that it’s important enough to wait for a better contract, or else it’s not going to change.

    • I absolutely agree. The music industry has been doing that for years. Some artists get it right, but others who absolutely can’t wait to get their names on that dotted line just don’t care. At first.

  2. Pingback: Taylor Swift Is A Big Stupid Head | Beefy's House o' Fun

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