Do you know who wrote your favorite song? Probably not.
As is the case with most songs, the songwriters who create them often go unnoticed and underpaid in an industry that worships the artists who sing them. Even lesser known artists, two of which we get hear from later in the article, are feeling the effects of being underpaid and under-appreciated.
By now you have probably heard about Taylor Swift taking her music off of Spotify. In a bold move that shocked the music industry, Swift’s choice has brought to light the shortcomings of this popular streaming service.
Before we dive into the nitty gritty, let’s stop and spell out the details of what Spotify really is. Spotify is a music streaming service that allows the user to search by artist, track, album, etc. There are two different forms of membership offered. One is free and available to anyone who downloads the app, and is supported through advertisements. The second is a paid, premium option that at $9.99 a month allows ad-free listening and access to the music database offline. Convenience is the name of the game with Spotify, offering premade playlists according to mood and genre. Offered to both free and premium users, these playlists make any occasion a good occasion for music.
So if Spotify is legal and paid for, then what is wrong with it?
Here’s the break down:
Basically, songwriters receive infinitesimal amounts of compensation for their music being streamed and consumed by the public through Spotify.
As of December 31st, 2014 Spotify’s total number of users hit 60,663,093 across 58 countries. In the US alone there are over 20 million users streaming from Spotify’s services. During the month of December, 5.8 million Americans signed up for a premium account while nearly 15 million Americans simply used a free account.
Though these numbers still seem impressive, the royalties distributed to the songwriters differs by the type of account being used. According to Digital Music News, the Spotify Premium royalty rate is 10 times greater than the free user royalty rate.
In one particular case described in Digital Music News, one of the most successful Finnish artists, Anssi Kela, released her numbers from royalty statement from Spotify. Over the span of four months her average stream payout under a free account was $0.003, making $3,159.96 with 1,058,313 streams. Compare this to her Premium account average per-stream payout of $0.0055, making only $1,079.87 with 194,782 streams over that same time span.
Though the Premium accounts do pay more per stream, there are not enough people using this type of account to make a significant impact.
The same December end-of-month metrics from Spotify reveals that 45 million of its 60.7 million members use its free, ad-supported type of account. This being said, songwriters and artists can count on making most of their Spotify royalties from the much lesser per-stream rate.
John Barker, President and CEO of ClearBox Rights and Chairman of the Copyright Society of the South, spoke to me on some of these issues. He even writes articles on these issues, which can be viewed here.
Barker discusses how very little the songwriters actually receive in terms of percentages from Spotify.
Barker reveals, “This is where it gets a little tricky. A Spotify VP told me in person that they pay 70% of their revenue to content owners. But, of that, the majority goes to the recording side, not the songwriter side. Reportedly, the (c) side [songwriters] gets roughly 10% of that 70%, and the(p) side [record company and artists] gets the rest. It’s been a long standing argument as to whether that ratio is fair, and the (c) side argues it needs to be higher on their side. I agree.”
It seems Spotify’s claims of giving 70% of its revenue to the people who deserve it was too good to be true.
This will come as a shock to most listeners, who thought listening to Spotify was the new, fair way to listen to music. Yet, as Barker reveals, the truth is in the 10%. The writers of the songs we have grown to know and love receive very little percentages of even smaller per-stream royalty rates. How is that fair?
It is important to note that Washington DC has spotted this discrepancy as well.
In the past few months the Copyright Office in Washington has come to the conclusion that “our music licensing system is in need of repair” as told in its report published in February.
With sections like “Writer and Artist Shares” and “Best Practices for Transparency”, the report aims to shed light on the currently deteriorating music copyright system. Washington realizes that the system put into place over 100 years ago simply cannot withstand the current digital music age. Changes are coming.
Barker has advocated for this change in Washington and brings insight to the situation from the music copyright standpoint.
He says, “Washington is slow. But I believe the Copyright Office and congress are beginning to realize music should be worth more. When these digital service providers (DSPs) first came onto the scene, everyone saw that they were trying to pay royalties, which was at least better than services that did not pay royalties. So, everyone wanted to support them, even though their rates were drastically low. The thought of support was, “at least their paying something”. Fast forward to today, and the mentality is beginning to shift (my opinion) that maybe we don’t need to make it so easy on them to have access to 100% of music, but rather realize music has greater value, and allow for content owners to charge more. I think it will take years for this trend to get some traction, but at least I believe the ship is beginning to turn.”
With artists like Taylor Swift bringing attention to the discrepancies in Spotify’s royalty distribution system, we can hope this change will come more quickly. The more awareness the public has about this issue, the quicker Washington will have to make these changes the music industry so desperately needs.
So how do the songwriters actually feel about Spotify?
We have discussed a lot of facts and a lot of music business jargon, but how do the songwriters who are actually affected feel about the situation? Do they actually care? Are they just happy to be making any money off of Spotify at all?
I talked with two up-and-coming songwriters/artists from the Midwest about their Spotify experiences.
I first talked with Casey Dubie, a singer/songwriter from rural Vermont. She recently released a new single “Motion Sick” which was featured on Noisetrade. Writing and playing guitar since the age of twelve, Casey has a deep passion for music and sharing her music with the world. Check out her music here.
When asked if she thought Spotify will be an influential part of her career, Dubie responded, “I think Spotify is great for up and coming artists because people are willing to listen to you without paying. Therefore your stuff can get out there. There are definitely pros and cons though. Being in the music industry is just in general a lot more difficult. You can’t make the same kind of money you used to make. If someone wrote a hit in the 90s, that would pretty much support them and their kids and even their grand kids for their lives. Now it’s a different game entirely. Most artists have to be involved in multiple things to make money.”
When asked what she has actually made from Spotify she replied, “I’ve made nothing from Spotify. At least that I know of.”
Dubie’s perspective seems to be that of many new singer/songwriters starting out. Spotify is a credible way to have their music be easily accessible, but not a way to make any money.
Why can’t there be a way to have music easily accessible while compensating the music creator for all their efforts?
Chris Hills, the guitarist and songwriter for the band Cardinal Harbor, gave me his opinion on the subject. The members of Cardinal Harbor hail from Chicago and have played their rock style music in famous halls like The House of Blues and The Metro. You can check out their music here.
Though the band is more active on Spotify than Dubie, Hills talks of a similar experience. When asked how much he has made through Spotify he replied, “Probably about $15. Spotify really only seems to be useful as a familiar and comfortable place for musicians to refer people to listen to their music for free.”
Barker also attested to this by saying, “I honestly don’t use it [his Spotify account] that much, more for reference.”
Hills suggests other platforms he has used that work better than Spotify.
He says, “I think that Soundcloud is a better resource for musicians that don’t already have significant followings because it is easy to link to different pages for downloads or social media. A great format that I have seen used very successfully that my band is going to try soon is linking Soundcloud to Facebook and offering downloads of songs in exchange for simply liking the page.”
As verdict comes in, it seem Spotify is loosing its battle as a progressive platform for musicians. Yes, having music readily available is nice, but when no money is actually being made, these musicians are finding new ways to share their music. Whether on Noisetrade, Soundcloud, or Facebook, new songwriters/artists are forced to become creative in how they promote their music in any sort of profitable way.
So where does this leave the average listener? Should you delete your Spotify account?
No, not necessarily. The major change needs to come from Washington and Spotify itself. If Spotify raised its streaming royalty rate even to be equivalent with iTunes’ $.09 rate, that would be an improvement. Additionally, the distribution of Spotify’s 70% revenue between songwriters and label royalties needs to be more balanced, not the 60/10 ratio it is currently.
Listeners should encourage these changes, making noise around the issue and not accepting the ‘free music for everyone’ ideal that has stirred from the digital music age. Though it is especially difficult for millennials, who have become used to the idea of free music, to want to change, we need everyone involved in order to stir change.
Music is valuable. If we as listeners don’t treat it as such, then music might stop being produced at the quality it is today. So, let’s pay for our music. Let’s make sure people are fairly paid. Let’s call out those who are hindering this progression.
We are talking to you, Spotify.