Streaming platforms underpay musicians

A US union has launched a campaign against streaming giant Spotify, which pays artists too little to earn a living while raking in billions for its chief executive and investors.

The Union of Musicians (UOM) launched “Justice at Spotify”, a campaign calling for the streaming service to be more ethical in how it deals with artists, in late October 2020.

“Spotify is the most dominant platform on the music streaming market,” reads the UOM statement. “The company behind the streaming platform continues to accrue value, yet music workers everywhere see little more than pennies in compensation for the work they make.”

It continues: “With the entire live music ecosystem in jeopardy due to the coronavirus pandemic, music workers are more reliant on streaming income than ever,” argues the union. “We are calling on Spotify to deliver increased royalty payments, transparency in their practices and to stop fighting artists.”

At last check, the campaign had been signed by 19 000 artists, including Philadelphia-based poet, musician and activist Moor Mother, and the New York-based booking agency Discwoman, which represents women, trans women and gender-queer talent in the electronic music community.

An unfair model

The campaign is calling for Spotify to pay artists the minimum of an American cent per song stream. Currently, artists are paid just over a third of a cent. To put that in perspective, the union argues that this equates to 786 streams to buy a cup of coffee, almost 300 000 streams a month to pay rent and 650 000 streams to be a full-time working musician, earning the equivalent of $15 per hour. That’s just for a solo artist. A band of three would need to triple those streaming numbers.

Spotify’s payment model has been heavily criticised for years, with many artists arguing that it privileges established musicians. They argue for a user-centric model, which would allow the royalties portion of a user’s monthly payment to be distributed to the artists they listen to.

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“Spotify currently pays artists using a ‘pro-rata’ model, in which all revenue is pooled, then distributed to artists according to a complex scheme,” writes the union. “The pro-rata model means that as artists on the top of the pyramid accumulate a greater percentage of streams, all other artists receive increasingly tiny payments.” 

The union argues that music workers create all the “enormous wealth Spotify accumulates for its [chief executive Daniel Ek], its investors and the major labels” and yet artists “continue to be underpaid, misled and otherwise exploited by the company … As Spotify’s valuation soars, we have seen no increase in our streaming payments.”

UK’s parliamentary investigation

Just a few days after the union’s campaign was launched, the United Kingdom’s parliament announced it would investigate the economic effect of streaming on musicians and record labels.

The inquiry notice stated that a committee from the Department of Digital, Culture, Media and Sport would examine the business models of global music streaming platforms including Spotify, Apple Music, Amazon Music and Google Play, as well as the sustainability of streaming for the music industry. “Music streaming in the UK brings in more than £1 billion in revenue with 114 billion music streams in the last year, however, artists can be paid as little as 13% of the income generated,” the inquiry notice states. Streaming may be a convenient way for music fans to access music, but the artists are seeing hardly any benefit.

These are not the first salvos Spotify has faced. An open letter from a multi-generational cast of hit songwriters in April 2019 lambasted the company for appealing a ruling by the Copyright Royalty Board to increase songwriters’ royalty payments from streaming by more than 40% over five years. Spotify, alongside Amazon, Pandora and Google, which also appealed the ruling, argue that this decision will be harmful to copyright owners.

How do South African musicians feel?

New Frame contacted many South African musicians to gauge how they feel about streaming services. One said his thoughts on Spotify were “really straightforward”, but he would agree to talk only anonymously. 

“The playlisters are the gatekeepers, and I can’t fuck with that,” he says by way of explanation. “Most booking agencies look at your Spotify numbers before they listen to your music. It’s what the industry is now.” 

For every musician who agreed to talk off the record, at least five interview requests went unanswered or artists were not prepared to talk – even with guaranteed anonymity.

“Spotify doesn’t pay enough per stream,” says the musician. “An artist can’t make any decent money from it unless they are on super popular playlists, which is hard to get for most.

“If you read the interview with the billionaire Swedish [chief executive] from a few months back, he says the new era means artists should produce even more records to survive. The only reason that should be even proposed is because of the system they have put [in place], which underpays artists.”

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As NME reports: “In the original interview, Ek said there was a ‘narrative fallacy’ about the idea that Spotify doesn’t pay enough for artists to live on. ‘It is about putting the work in, about the storytelling around the album, and about keeping a continuous dialogue with your fans,’ [Ek] said. ‘I feel, really, that the ones that aren’t doing well in streaming are predominantly people who want to release music the way it used to be released.’”

Amid the international media coverage of the union’s campaign, Spotify has not yet commented. New Frame reached out to Spotify on their press email address from a release dated 10 November but received a notification that there was a mail delivery problem. 

Boycotting streaming services

Another musician says the money artists earn from streaming services is so minimal he doesn’t even consider it a revenue generator. “I kind of see my music being on streaming services as a promotional thing,” he says. “I want the music available in as many places as possible. It’s not about the money, although it would be nice to earn real revenue from streaming.”

The musician says that revenue earned from streaming is coming into greater focus at the moment because of Covid-19’s effect on live music. “Live music is the real money-maker for artists,” he says. 

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Another musician says the music industry has always treated artists badly. “It’s never been fair. It’s always been hard. It’s just harder now.”

The musician says that in the era of CDs, he may have sold 5 000 to 10 000 CDs when he released an album, which would equate to between R25 000 and R50 000 profit for him.“But 5 000 to 10 000 streams are not going to get you anywhere,” he says. Without government legislation, he can’t see the streaming services changing how they operate. 

But he did point out that there is already awareness among fans as to how streaming services treat artists. This has led to a lot of people boycotting the streaming services and only consuming music through sites such as Bandcamp, which offer a fairer revenue split with artists. All the musicians interviewed for this story consider Bandcamp a revenue source for their music.

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