Streaming First Threatened the Record Industry in the 1930s. Wait–What?

Artists continue to express all kinds of angst over how streaming is killing them. The pittances they receive in streaming royalties is making it difficult for them to survive. “We’re making so much less than with what we got from selling music!” they say.

Very true. But the travails of today’s musicians is nothing new. There was a situation that prompted the same kind of outcry almost a century ago. It was called “radio.” Rocknerd takes a look.

A common record industry number (which seems to have originated with David Lowery) has it that it would take 288 million Spotify plays to make the annual income of an average Spotify employee. This is plausible, but the comparison is specious — the pay for a play on a streaming service is comparable to the pay per listener for a play on a radio station. Because, of course, streaming replaces radio.

Lowery inexplicably didn’t include a comparison of BBC airplay royalties from “Take The Skinheads Bowling” to John Peel’s salary, but Adam Bowie ran what numbers he could find in 2014 and got a play on Capital Radio paying three times a play on Pandora. You could triple the songwriter royalty from Spotify, and that’d be a fine thing to do — if Spotify doesn’t go broke first, leaving streaming entirely to Apple and Google. But it can’t possibly make what record sales do.

All this has happened before. In fact, the streamingpocalypse first happened in the 1930s! Except then it was called radio, and during a depression. US sales of 100 million units in 1930 became just 6 million units in 1932, because people (a) had radios (b) had no money. A bit like now!

Read the entire article here.

But we need to face facts in today’s environment. We’re going to have to figure out how to make streaming work. This is from FYIMusicNews:

Michael Raine, a Carleton journalism and Humber journalist post-grad, has been the assistant editor of Canadian Musiciansince 2012.  He recently did some legwork to try and figure out where the proceeds of the streaming services ended up. You can read his article here.

Below, is a conversation between Nick Krewen, on behalf of FYI, and Mr. Raine about his article, Streaming Money Is Flowing… But Where To?

FYI: It seems that with streaming, record contracts are more convoluted these days…

Michael Raine: When I was speaking to entertainment lawyers Paul Sanderson and Safwan Javed, it wasn’t that they were more convoluted, but the terminology is broad enough that they’re using the old terminology to apply to what essentially is a completely new medium. The idea that record contracts, on the major label side, are still broken down into two revenue streams – the licensing and the sales – that have two very different splits as far as what’s going to the artist and what’s going to the label. On average, it seems that the licensing revenue is split 50/50 between the label and the artist, which is obviously fair. It’s on the sales side that things are split heavily in favour of the label. The odd part is just this idea of streaming, which on the surface, seems closer to a licensing that it does to a traditional sales paradigm. But that’s being included as sales, and therefore, that’s the reason why so much of that revenue is going to the labels and not really making its way to the artist.

Keep reading.


Alan Cross

is an internationally known broadcaster, interviewer, writer, consultant, blogger and speaker. In his 40+ 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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