Critique

Top 40 Artists Want to Kill Streaming Services, Why Should Independent Artists Fight to Save Them?

Many major artists have decried music streaming services as the final nail in the coffin of the music industry. It’s true that artists see fractions of a cent for each stream they receive on major streaming platforms, and that’s no way to make a living or sustain an industry. Tens of thousands of dollars go into the mere production of an album, from studio time to engineers, to producers. Making a high-quality album is a large investment that doesn’t always pay off.

Some find the outcry of top 40 artists over streaming services seems a bit disingenuous. One of the most successful artists of 2016, Taylor Swift, brought in around $80,000,000 and was one of the most vocal opponents of streaming services. She even removed her entire catalog from Spotify until recently. Ironically, it wasn’t some deal Taylor Swift’s managers hammered out with Spotify that got her to re-release her catalog to the streaming services. Rather, it was a grudge with rival pop star Katy Perry. The fact a grudge was enough to prod Ms. Swift back into the streaming world shows, potentially, how little the principle of fair compensation had to do with her streaming boycott.

While potentially disingenuous, the frustration of major artists with streaming services is understandable. They’re receiving a fraction of a cent per listen on the services, and that money then gets passed around to everyone at the label and management companies before finally making its way to the artists. Additionally, a lot of bands have multiple members or have musicians that collect royalties on the recordings, so that fraction of a fraction of a cent that reaches the artist, it then gets split even further. It is infuriating to see a song have millions of streams but only sees a small percentage of those streams converted into revenue for the artist. With the physical sale of music declining, artists are having to rely more and more on touring, which is not always a safe investment either.

With all of these deep-seated issues, why should independent artists bother to speak up for the validity of streaming services? In fact, a lot of independent musicians abstain from releasing music on streaming services because, in their eyes, it boosts their artistic integrity. The reason indie artists should support streaming services is that most the woes of streaming that top 40 artists preach from their diamond encrusted soapboxes do not apply to independent artists. The issue popular artists take with streaming is that such a small remuneration per listen is then divided amongst the army it takes to produce those albums. Independent artists have far fewer mouths to feed in that regard. Independent bands, by definition, are not tied to a record label. Therefore there is no contractual need to pay a percentage of album revenue to the label. While it’s not unusual for a band to have a manager, that should not be so large a percentage of the revenue that it is a burden for the band.

The issue popular artists take with streaming is that such a small remuneration per listen is then divided amongst the army it takes to produce those albums. Independent artists have far fewer mouths to feed in that regard. Independent bands, by definition, are not tied to a record label. Therefore there is no contractual need to pay a percentage of album revenue to the label. While it’s not unusual for a band to have a manager, that should not be so large a percentage of the revenue that it is a burden for the band.

A band I know personally was able to hit the streaming market with an album that had a popular song. The song was being listened to all over the US and even had international success. Currently, the song has racked up 1.2 million streams over the last two years or so.

While not life-changing, most bands would not turn down that small degree of success. The total amount earned from that album release in 2 years amounts to…$5,618.42. That money has been enough to fund two more albums, a single, equipment repairs, and all other band-related expenses. This source of revenue also freed the band up to divide the money from gigs and merchandise amongst the band members. Without this streaming services, the band would have been much more financially strapped. Viewed through this bright lens, streaming services have allowed a band to grow and flourish without being strapped for cash.

Now, here comes the darker lens. Let’s do some depressing math for a second. Let’s assume that each person who listened to that song listened to it 20 times. That gives us a total of 60,000 listeners. We’ll also assume those listeners purchased the song from iTunes (not the whole album) instead of streaming it. From a 99¢ song, a band receives about 70¢ in revenue from an iTunes song sale. Now, those take 60,0000 listeners and multiply by 70¢ each. That gives us a total of… $42,000. For a band to make $42,000 off of streams, they would have to accumulate around 6 million streams, assuming the band makes the somewhat standard rate of 0.07¢ per stream (not 7¢, 0.07¢). Let that sink in for a moment.

Are you disgusted? Do you feel anger and hatred for streaming services? Are you canceling your streaming service right now and only purchasing music? You’re a saint and a martyr, bands will love you for it. The harsh reality of the industry is that people just don’t buy music anymore. By and large, people have shifted to streaming because it’s more consumer-centric. It’s a better deal for the listener, and the artists take a hit because of it. Consumers are more willing to give new music a try because there is less risk involved for them. This more adventurous spirit in the consumer provides small independent artist a larger opportunity to get their music heard. Once an artist has made contact with a fan via streaming, it is then the band’s job to convert that fan into an active consumer of content (video, merch, etc.), and ensure that fan becomes an evangelist.

Streaming services don’t seem to be going anywhere in the near future. It is more productive for independent bands to figure out how to leverage the outreach capabilities of streaming rather than spend their time fighting against it and decrying it as the downfall of the music industry. Streaming services are only the downfall of those artists who rely on streaming services explicitly for their revenue.

This essay is from cinephile and film critic, Andrew Border

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