Explaining the Music Industry’s Math Problem, One More Time

I’m really tired of artists bitching about how little they make from streaming their music on sites like Rdio, Spotify, Deezer and all the rest of them. Comparing payment for streams to royalties from music sales is a total apples-and-oranges situation.  Quartz attempts to explain the goofiness of this debate.

The standard music superstar critique of services like Pandora and Spotify (there have been a lot of them lately) goes something like this: My song was played millions of times on [insert service here] and all I got was a lousy few dollars.

For specific examples see: Pharrell Williams, Aloe Blacc (the singer on Aviici’s “Wake Me Up,” the most streamed song on Spotify) and um, Bette Midler.

Taylor Swift didn’t get into this level of detail when she criticized (and then withdrew her back catalog from) Spotify last year. Neither did Jay Z when he launched his competitor to Spotify last month. But their concerns about streaming are broadly similar, and have fed into the narrative that digital music services are shortchanging artists by paying minuscule amounts in royalties for huge numbers of track spins.

These royalties often are contrasted with bigger payouts from old-fashioned broadcast radio. The problem is that this is a completely misleading comparison. And here is why:
A single stream of a song on Pandora or Spotify typically reaches an audience of one person. A single spin of a song on radio reaches an audience many times bigger than that, depending on the actual size of the station’s listenership.
This matters because the US government officials are currently considering sweeping changes to the system for music licensing in the US and, perhaps influenced by the rhetoric, they are expected to rule in favor of publishing companies and songwriters by changing arrangements that have been in place since the 1940s.
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Alan Cross

is an internationally known broadcaster, interviewer, writer, consultant, blogger and speaker. In his 30+ years in the music business, Alan has interviewed the biggest names in rock, from David Bowie and U2 to Pearl Jam and the Foo Fighters. He’s also known as a musicologist and documentarian through programs like The Ongoing History of New Music.

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