It’s a story without bold names, or at least not the kind you usually read in Vanity Room.
And yet, it’s the story of more than 28,000 musicians and music industry workers, and some of the biggest companies in the world.
At the start of the pandemic, when live music was shut down, a group of indie musicians and music workers began meeting weekly on Zoom to share ideas on what we could do to improve the difficult situation at hand. which we were faced with. From these meetings emerged a new advocacy organization, the Union of Musicians and Allied Workers (UMAW). And among the actions taken by UMAW was a reexamination of the economics of music streaming. From scratch, you might say, what it looks like for real working musicians.
Streaming dominates the recorded music industry – it’s now responsible for 83% of all US recorded music revenue, according to record label association RIAA. The remaining 17% includes every other use of recorded music you can think of: not just physical sales and digital downloads, but also soundtracks for movies and TV, and licensing for commercials and trademarks. There just isn’t much left of a recorded music business outside of streaming.
The problem is that streaming barely pays recording artists. There are currently no direct payments from streaming platforms to the musicians themselves, as is the case, for example, with satellite radio. The average per-stream royalty paid by platforms to rightsholders (i.e. record labels) is $0.007 gross, according to the National Bureau of Economic Research, and record labels typically keep between 50% and 85% of these receipts. As a result, it takes tens of millions if not hundreds or thousands of millions of streams for artists to earn anything like a living wage from their streaming work. Many artists effectively no longer earn any income from their recordings.
Meanwhile, the streaming platforms themselves are booming: their revenues grew 24.3% in 2021, to a total of $16.9 billion. Paid streaming is only dominated by a few companies. According to market researcher MIDIA, Spotify is by far the major player with 31% of the market, more than double its nearest competitors, Apple (15%) and Amazon (13%). Add in Chinese media giant Tencent (13%) and Alphabet/Google’s YouTube subscription service (8%), and you have 80% of all global streaming subscription revenue managed by just five companies, including many of the richest in the world.
Note that only one of these companies would even call itself a music business – and that’s probably only temporary. Here’s Spotify co-founder and CEO Daniel Ek speaking to his investors earlier this year, as quoted by Variety:
“The best companies — think of names you all know very well — are very different today than they were when they started,” Ek said. “They made their initial mark in one specific category: books. [Amazon]look for [Google]desktop computers [Apple]. And then they redefined the way we think about these categories by expanding their potential through innovation…. And it’s exactly the same journey that we’re doing.
Ek’s points of comparison are not random. They are its closest competitors in US and European music streaming. Spotify’s recent investments in podcasting, sports and games make it clear how little music is ultimately about the company – its corporate statements now refer to ‘audio’ rather than ‘music’ .
In other words, recording musicians have become entirely dependent on companies that seem to have little or no interest in the future of recorded music. These companies are growing while musicians are suffering.