Does streaming devalue music? - Part 1
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Read part 2 - Ways to support artists
Taylor Swift made headlines when she decided to remove her whole discography off of Spotify in 2014. “Piracy, file sharing and streaming have shrunk the numbers of paid album sales drastically, and every artist has handled this blow differently,” Swift wrote in Wall Street Journal. She’s not wrong, as she herself is one of the victims of the low pay rates.
In a 2014 interview with Time Magazine, the head of Swift’s previous label, Scott Borchetta of Big Machine Records, stated that Swift had only made $494,044 from having her whole discography streamed nationwide on the platform for 12 months.
It’s not a small sum, but for an artist of Swift’s magnitude, the figure raised some eyebrows. For context, Swift was able to sell 1.287 million copies of her pop-debut album ‘1989’ in its first week. Each album was priced at approximately $12, so Swift should have earned approximately $15 million from her first week of album sales.
Another artist getting the brunt from streaming is Aloe Blacc. Avicii’s ‘Wake Me Up,’ a song Blacc co-wrote and sung, was the most streamed song in Spotify history back in 2013. Yet after royalty, songwriter and publisher cuts, Blacc only earned less than $4,000 in domestic royalties from approximately 168 million streams in 2013.
However, despite the poor payment system, we cannot ignore the elephant in the room. The presence of interactive streaming in the music industry is no joke. As of February 2020, Spotify has amassed 248 million monthly active users and held a 36% share in the global music streaming market. In 2019, its rival Apple Music boasted an estimated 68 million active subscribers.
In the US alone, interactive streaming was responsible for 80% of revenue made by the music industry during the first half of 2019, a percentage that is equal to $4.3 billion. In Indonesia, revenue from streaming services is projected to reach $148 million in 2020.
It’s clear that the impact the interactive music streaming industry brings is nothing less of powerful. But even a billion dollar industry is subjected to a few flaws – one of the most notable is the fact that it runs on a defunct and highly imperfect business model, and the consequence of this is at the cost of the earnings of musicians.
There is actually no fixed ‘per stream rate’ because streaming is a multifaceted issue. Some factors a stream rate has to take into account include geographical location, how many people are listening to the song or album, and even the type of platform the song or album is being streamed from.
“If you look at the numbers stated on Spotify, you get Rp50 to Rp80 per stream. It differs in each country. However, the payment system is not as simple as it seems; there are more factors to consider,” said Indonesian singer Ben Sihombing.
For services that offer free subscriptions like Spotify or Soundcloud, these rates may proportionally decrease as new non-premium (more specifically non-paying) users sign up– numbers to be explored in the second part of this article. This idea was also expressed by Taylor Swift in an open letter directed to Apple Music (a letter that was uploaded as a Tumblr post, but was soon taken down).
“I’m sure you are aware that Apple Music will be offering a free 3 month trial to anyone who signs up for the service. I’m not sure you know that Apple Music will not be paying writers, producers, or artists for those three months. I find it to be shocking, disappointing, and completely unlike this historically progressive and generous company.”
Image: Tidal
However, for another streaming competitor Tidal, the percentages and artist payouts are considerably more generous. This data is showcased in the graph below.
However, like Ben Sihombing mentioned earlier, the payment system is not that simple. The right holder fees reflected in the graph are not yet subjected to tax cuts, division of shares amongst fellow songwriters, producers, publishers and even aggregators.
Reducing the economic value of music is already a significant standalone issue, but its byproduct is equally damaging. It creates a culture of eliminating and ignoring the efforts behind the creative process. The only way to give an object a universally acceptable standard value is to give it a nominal value.
But, for something as abstract as music or even art which value is very much subjective to the experience or benefit they offer, what exactly do we want consumers to pay for? The digital era and interactive streaming is eliminating this conversation.
Musician Adam Neely argues, is the way we consume music affect our perception of its value? To an extent, his argument makes sense. Like any other way to price an economic good, the way we price music is directly proportional to the cost of its production, and measures the benefit it offers to the consumer.
Neely gives us an example of purchasing a tote bag with Vincent Van Gogh’s painting printed on it. “We’re paying for the tote bag, not the artwork.” Essentially, the society is putting a price tag on the object, not on the artistic experience.
Perhaps the underwhelming nominal value of music also stems from the fact that it is readily available. Scarcity or rarity is also one of the factors that may help determine the economic value of a certain item. It is easy to duplicate files of digital nature, so digital distribution often eliminates that ‘limited’ feel.
This, in turn, affects our very perception of music. Since music is essentially unlimited and readily available, we can enjoy and stream it at any place and any time. Platforms like Apple Music or Spotify even have curated playlists for daily activities. For example, a chill lo-fi music compilation to study to, or a greatest hits playlist to workout to.
But those daily activities take the focus away from the music, which makes music’s role, in that setting, secondary and less important.
In conclusion, streaming may not be the best business model for artists to receive proper recognition for their crafts, but as Neely said, “Those who fight fate against the tide of history and refuse to adapt, end up fighting a losing battle,”– a sentiment shared with Taylor Swift, who decided to put her catalogue back on Spotify in 2017 to thank her fans after sales of her album ‘1989’ exceeded 10 million copies worldwide.
It’s difficult to determine how the music industry will operate from here on out, because even the biggest names in music, such as Taylor Swift, eventually succumb to Spotify’s massive following and demand.
