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Are streaming services hurting the music industry? Here’s our take.

Any young musician who has tried to build a career for themselves in the last ten years will have faced the struggles of navigating an industry now dominated by streaming. In 2022, if you want to listen to music, you pretty much have two options – buy your music from independent sources, or pay a monthly subscription to a streaming platform of your choice.

For consumers, the second option seems far more appealing. Buying your music is an expensive hobby, with the price of physical records now skyrocketing, and the average album on iTunes sitting at around R150. Streaming is certainly the more cost-effective option, at an average of R50 per month for as much music as you want, but the sad reality is that it comes at the artist’s expense.

According to various sources, Spotify pays rights-holders between $0.003 and $0.005 per stream. Going off this, you’d need to have your music streamed roughly 675 times just to buy one cup of coffee.

According to Apple Music for Artists, they “believe in the value of music and paying creators fairly for their work.” They claim that their average per play-rate is $0.01 but this doesn’t factor in label or publisher royalties. This value also varies by subscription plan and country or region.

In South Africa, going on an average of R0.04 per platform, your music would need to be streamed roughly 560 times every hour to earn minimum wage. That’s 138 880 streams a month. Just to earn minimum wage. To put that into perspective, most local artists are lucky if they top 100 000 all-time streams on a track, let alone every month.

So if the artists aren’t benefitting, who is? Maybe this will answer your question – in the third quarter of 2021 alone, Spotify reportedly earned over $2,5-billion-dollars. Similarly, Apple Music boasted a modest $4,1-billion-dollar revenue for the 2020 financial year.

Sadly, the reality is that there aren’t many fully-fledged alternatives to streaming. What we’re looking at isn’t far from a monopoly – it would be the equivalent of career-suicide if an artist decided to boycott streaming services entirely, because there’s practically no other type of platform where legal music listening is possible, or at least not with the catalogues that Spotify and Apple Music offer. And if we want to keep on listening to the music we love, it means we can’t boycott these services either.

However, I don’t think the solution is as simple as seeking alternative platforms. The truth is that streaming companies still offer a valuable service, and if everyone had to boycott these platforms at once, it would inadvertently impact artists more than it would benefit them. During the pandemic, streaming became the single source of income for many musicians, and for some, remains so today.

Both Spotify and Apple Music also have various initiatives in place aimed at giving back. Apple Music’s #UpNext and #AfricaRising talent discovery campaigns have done a lot for local talent in SA, spotlighting new artists each month and exposing them to global audiences that they would not otherwise have reached.

Similarly, Spotify successfully launched their Artist Fundraising Pick, a feature that allows listeners to make direct donations to bands, crew members, and other charitable organizations.

So, what’s the answer then?

Ideally, I’d say, “buy your music”, but that’s not a viable option for everyone. I’m at fault too. Even though I buy most of my music, I still have a Spotify subscription, and for a long time I felt guilty about that. But we’ve got to realize that it’s not our responsibility alone to change the way the streaming industry works. Spotify, Apple Music, the other major platforms – they’re the ones who should be acting. We might have the power to disrupt the industry, but we won’t ever win against multi-billion-dollar companies who aren’t willing to listen.

Just look at the recent controversy surrounding Joe Rogan. Amongst other musicians, Neil Young and Joni Mitchell took their music off of Spotify in protest of Rogan spreading Covid-19 misinformation, yet all Spotify did in response was remove a few of his episodes and introduced content advisories.

It’s no surprise that they were unwilling to compromise on such a lucrative asset. Spotify holds exclusive rights to the show, for which Rogan was reportedly paid over $200 million. But that’s money they’ll make back in advertising alone, not to mention how many subscribers the show attracts, being the platform’s top-streamed podcast series.

Bandcamp is currently one of the only major online music services that well and truly puts the artist first. Besides the fact that consumers can buy music directly from the platform, with artists getting almost 80% of total revenue, they have various initiatives in place aimed at paying musicians as much as they can. On the first Friday of every month, the service completely waives its commission fees, and their ‘pay-what-you-like’ feature is a clever and cost-effective way of encouraging real purchases, for music that you own.

Soundcloud also just introduced a user-centric royalty model that increases payouts to musos beyond the big stars. And it’s a simple fix – instead of the money you pay every month going into a pool that then gets divvied up between artists, labels, and distributors (this is how Spotify and most streaming platforms work, the full breakdown of which can be found here), your monthly subscription to Soundcloud instead goes directly to the artists you listen to, and the results so far are encouraging.

Psych-rock veterans Portishead recently released a cover of ABBA’s “SOS” via Soundcloud, and in less than a month, the track had reportedly earned six-times as much as it would have with the same number of streams on Spotify or Apple Music.

It seems like a combined approach might then be our best solution. Consider switching to one of these platforms, at least for smaller artists, and stick to Spotify or Apple Music for your Drake’s and your Dua Lipa’s. Buy music where you can. Encourage your friends to do the same. And finally, speak out about these issues. Putting pressure on these companies is something we should all be doing. The power lies first and foremost with the platforms themselves, so the question now is, will they listen? Are they willing to make real, structural changes? If the answer is yes, I’m hopeful that we’ll find a better way forward, together.

You can also join the Union of Musicians and Allied Workers (UMAW), free of charge, and get access to monthly meetings, planned peaceful protests and other events, all of which are focused on fighting for justice in the music industry. Follow the link to become a member, and to sign a global petition that calls on Spotify to pay at least one cent per stream: https://www.unionofmusicians.org/justice-at-spotify