right now in the industry: streaming money
if you live anywhere in america that’s not under a rock right now you’ve seen the countless signs & indicators that the world is changing dramatically, & the music industry is no exception. there is a long overdue battle going on right now about the way artists are compensated for their music & who gets to profit from it, especially in the hip-hop community.
a recent headline from publication company, billboard, has been going viral over the past few weeks regarding spotify cutting an estimated $150 million in royalties from songwriters & publishers. as if streaming services didn’t already pay less than cents on the dollar to songwriters for their music in the first place. independent artists & signed artists alike are under attack. we’ve all heard the many horror stories of signed artist being taken advantage of by the labels they’re signed to in the past. before streaming services were a thing, an artist would drop a song or album, the album would sell for about $10, & labels would take large percentages of each sale leaving the artist with nothing in a lot of cases. this is made possible because artists see an opportunity in labels to help boost sales & promote their music in front of an already generated loyal fanbase. this usually comes with a huge financial sacrifice because of contracts which basically state an artist can’t profit from their work until all expenses & advances are recouped by the label first. so basically, labels were/are just loan sharks for artists seeking exposure. from the perspective of the career of an artist this looks like, a single album that made you $10 per sale became more like $2 per sale once labels got involved (if you were even paid at all due to deficits in recouped investments), & then came labels got intercepted by streaming companies to drop that number down even more to $0.003 per stream. so that $10 per album sale labels took from you got turned into a monthly subscription streaming services take from the labels... no wonder labels are fighting with streaming services. they’re arguing over who gets to rob the artist more.
since the birth of streaming platforms, artists no longer needed to rely on labels to make their music available to the masses. an artists could make a song, subscribe to a membership with a distribution service like Distrokid or united masters, & have their music played alongside bigger artists like partynextdoor & beyonce. thus, sparking a whole new generation of independent artists that we see today. the problem with streaming though is artists invest so much time, money, & energy into creating music the whole world consumes just to be paid a few dollars per thousand streams. statistics show, one million streams on spotify is equivolent to no more than $4k in royalties. sure, your music is on the same shelves as the top selling artists in the world, but streaming has made the current model of music as a business, worthless. now here we are recieving more news that streaming is about to become even more worthless.
“By adding audiobooks into Spotify’s premium, duo and family tiers, Spotify now claims it qualifies to pay a discounted “bundle” rate to songwriters for premium streams given that it now has to pay licensing for both books and music from the same subscription price tag — which will only be a dollar higher than when music was the only offering.” - Yahoo finance
so spotify has both the audiobook & music industry on lock and plans on lowering streaming rates because both services are available when a user subscribes to the platform. this will actually increase the price of a Spotify subscription for users while cutting revenue for the songwriters who built & keep their business alive.
the middle man. labels, publishing companies, streaming services, & 3rd party vendors are all examples of middlemen that profit anytime an artist with great music needs somewhere to sell it. this can be a useful tool for some but for the overall industry of music (especially hip-hop), middlemen have made the gap between the successful artist and the struggling artist so far apart that the initial investment when getting started as an artist starts to hardly seem worth it. between production, recording studio costs, mixing & mastering, investing in a distribution platform, building a social media presence, spending money on music videos, promotion, etc. the return on investment is close to nothing for the artist. being a musician has become a joke; there’s no longevity or sustainability in streaming music with the current model of the industry. artists need a new way to distribute their music & connect with their fans.
artists like larussell, grimes, & snoop dogg are pioneering the movement to eliminate the middle man & return the power of art back to the artists. nft’s is an emerging market still in its early stages, but blockchain technology (what nft’s are built on) promises a way to decentralize music, erase the middleman, & give power back to the artist. private websites that exclusively house your music for fans to enjoy seperate from apple music or spotify is an alternative a lot of independent artists have adopted. “pay what you want” is a method artist, larussell, has been capitalizing on for the past few years now. where he actually allows the audience to pay whatever price they think it’s worth for access to his music. not only that, but there’s also opportunity for consumers to recieve stake, or direct ownership in his music. this means that larussell’s music is now an investment asset which allows fans to gain a percentage of royalties as his career grows. this transforms music from just being a worthless audio file that gets exploited by whoever is capable of getting it played by a large audience to an asset for fans who see value in a particular artist. fans can directly support the artist financially as well as generate income from the music they enjoy. the same way a painting is considered fine art as well as an appreciating asset, music will soon be looked at as rare, collectible commodities that can be traded & leveraged for value. it’s true, the old model of selling cd’s is over, but the idea of creating a body of work, selling it for what it’s worth, & 100% of the profits being recieved by the creator(s) is still alive & well. the industry is changing & we must change with it.
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