The question of whether online streaming services are beneficial for artists and the music industry is a considerably complicated issue that has been a hot debate topic in recent years. The service has often been accused that it does not treat the musicians in a fair manner. In 2013, Radiohead’s Thom Yorke called Spotify, “the last desperate fart of a dying corpse” when referring to the music industry and its attempts to revitalize itself. In July of 2014, Taylor Swift wrote a Wall Street Journal editorial, “the value of an album is, and will continue to be, based on the amount of heart and soul an artist has bled into a body of work.” Swift does not see a notable difference between piracy and online streaming services. She explains that “Piracy, file sharing and streaming have shrunk the numbers of paid album sales drastically, and every artist has handled this blow differently.” Swift believes that all artists should not take this new situation lightly. She emphasizes “that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album’s price point is. I hope they don’t underestimate themselves or undervalue their art.”
Online services consistently underpay the publishers and songwriters, who are rightfully deserving of their shares. The Wall Street Journal brings to our attention that some music-publishing executives estimate that services such as Spotify, YouTube and Google All Access collectively owe 50 million to 75 million dollars in royalties to songwriters and the music publishers who represent them. This total amount is not confirmed; however, it is a general consensus that the systems currently in place do not adequately keep track of whom to pay and how much they are owed.
The issue is mainly thought to be connected to the complex rights involved in the process of music sales. The majority of sales royalties are owed to the record company. The record company is responsible to divide them up with the artist in terms of their individual contract. Additionally, a much smaller fragment is due to the songwriter responsible for the written words. The record company owes the songwriter and/or publisher an estimated 10 cents for each copy of the recording that is created.
Streaming services, like Spotify, are generally required to pay a partial royalty to the record company for the recording, which is customarily valued at ten percent of the total royalty. According to the Wall Street Journal, in December of 2014, that amounted to slightly less than four percent per stream on Spotify in the U.S.
The record companies generally do not include the songwriter and publisher information for the streaming services. This omission is making it harder for the streaming services to adequately pay these artists and thus creating an unfair environment.
A separate Wall Street Journal article has recently stated that Spotify is considering giving in to big-name artists’ demands, such as Taylor Swift. “Spotify has told music executives that it is considering allowing some artists to start releasing albums only to its 20 million-plus subscribers, who pay $10 a month, while withholding the music temporarily from the company’s 80 million free users.” The fact that Spotify is considering making these changes is a powerful example that Swift and other artists have a significant influence on Spotify and other streaming services.
In summation, the artists of our time should be adequately rewarded for the work that many of us are able to take advantage of through online streaming services. Many artists see these services as an enemy of the music industry. According to Audiam Inc., a technology company with the main goal of to recover unpaid royalties, Spotify only paid songwriter royalties 79 percent of the time. This is an unacceptable way to treat the artists of our time. However, now that many consumers no longer feel the need to buy products, it is difficult to prevent streaming services to dominate the market of music consumption. There needs to be a more accurate way of keeping track of the artists to pay and how much’ however, currently it seems that Spotify will continue to attract a majority of the consumers in the industry.
Karp, Hannah. “Spotify Considers Allowing Some Artists to Withhold Music From Free Service.” Wall Street Journal. 8 Dec. 2015. Web. 9 Dec. 2015.
McIntyre, Hugh. “Taylor Swift Vs. Spotify: Should Artist Be Allowed To Opt Out of Free Streaming?” Forbes. Forbes Magazine, 8 Aug. 2015. Web. 4 Dec. 2015.
Seabrook, John. “Spotify: Friend or Foe? – The New Yorker.” The New Yorker. 14 Nov. 2014. Web. 4 Dec. 2015.
Swift, Taylor. “For Taylor Swift, the Future of Music Is a Love Story.” The Wall Street Journal. 7 July 2014. Web. 5 Dec. 2015.