Is Streaming Music Ripping You Off?

I’ve been reading more and more about how opaque the situation is regarding the fees we pay to streaming music services. Can we be sure that the $10/month we pay is going where it should? The short answer is “Not a chance.” Why not? The answer is…complicated. Start with this article from Medium.

If you subscribe to a subscription music service such as Spotify or Apple Music you probably pay $10 a month. And if you are like most people, you probably do so believing your money goes to the artists you listen to.Unfortunately, you are wrong.

The reality is only some of your money is paid to the artists you listen to. The rest of your money (and it’s probably most of your money) goes somewhere else. That “somewhere else” is decided by a small group of subscribers who have gained control over your money thanks to a mathematical flaw in how artist royalties are calculated. This flaw cheats real artists with real fans, rewards fake artists with no fans, and perhaps worst of all communicates to most streaming music subscribers a simple, awful, message: Your choices don’t count, and you don’t matter.

If you love music and want your money to go to the artists that you listen to, consider this simple hack. It’s easy to do, breaks no laws, does not violate any terms of service, directs more money to your favorite artists, but doesn’t actually require you to listen to any music, and best of all, it could force the music industry to make streaming royalties fair(er) for everyone. Sounds good, right?

So let’s cut to the chase. Here’s the hack:
This September, when you aren’t listening to music, put your favorite indie artists on repeat, and turn the sound down.

You might be saying “Wait a second, turn the sound down? How the heck does that do anything?”

Good question, let me explain.

Keep going. Once you’re done that, continue on with this article from Fusion. This is where it gets REALLY confusing.

A ton of money in the music industry is going missing. Some companies, like Kobalt Music Publishing, have platforms that watch their money in real time. And yet according to a recent report by Berklee College of Music, somewhere between 20-50 percent of royalty payments aren’t making it to the correct recipients. And in a $45 billion dollar global music economy, that figure certainly isn’t chump change.

So where is all of that money going? The business of streaming music, as it stands today, is confusing, muddy, and incredibly mysterious. And that’s part of why it’s so controversial.

From the very beginning, the check written could be wrong.

Companies that stream music—like Spotify, Pandora or Apple—pay artists in exchange for playing their songs. Somewhere between the company cutting a check to cover the music and the artist— be they a performer, a songwriter, a sound engineer, or a producer— depositing money into a checking account, dollars are disappearing.

In their report, Berklee surveys the current music industry using studies, first accounts and input from Berklee students and faculty. It both tackles the issues currently facing the music industry and provides suggestions for how to affect change going forward. One of the biggest problems the report addresses is the lack of transparency in the industry that allows money to go missing.

 Streaming companies swear that they are cutting giant checks every year, and that they cannot be held responsible for the mess created by the music industry. Daniel Ek, the CEO of Spotify, wrote in a blog post last November, “As I said, we’ve already paid more than $2 billion in royalties to the music industry and if that money is not flowing to the creative community in a timely and transparent way, that’s a big problem.”
Those payouts should be easy to prove; the companies can produce statements of how much money they’ve paid out. But it’s difficult to be absolutely certain that the dollar figure on the check is the correct amount.
Keep going. (Thanks to Steve for the link to the second article.)

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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