Will Streaming Ever Pay for Musicians?

By Brian Wise | From the November-December 2020 issue of Strings magazine

In a recording career that stretches back some 30 years, British violinist Tasmin Little has seen a lot: the heyday of the CD, the crossover boom, Napster, iTunes, and the MP3. But she wasn’t quite prepared for the earnings statement that arrived in April, just as her performances were cancelled due to the coronavirus pandemic.

“My initial reaction was one of incredulity,” says Little, recalling the moment when she realized that she had been paid £12.34, or around $15.50, for six months of streaming on Spotify. Little, whose recorded catalog includes more than 50 albums for Chandos Records and other labels, took to Twitter to vent. “Is this fair? There must be a better way,” she wrote in one of a series of Tweets.

Little has more than 735,000 followers on Spotify, a listener base that far exceeds that of some major American orchestras. By one estimate, she would have had 3.5 million streams during this earnings period. “I saw it on my statement from one of the companies for whom I have worked a great deal,” she explains in an e-mail. Upon asking the label for further clarification, “I was told that this was according to my original percentage agreement.” She adds, “It is a fraction of what I used to receive in terms of royalties.”

Streaming has boomed as live music has nearly come to a halt. It accounted for 70 percent of recordings consumed during the first six months of 2020, according to Nielsen Music/MRC Data, up from 63 percent at the same time last year. Little’s exasperation was echoed by some of her peers, who feel that they’re stuck with streaming models that reward only the wealthiest and most visible performers.

“It absolutely rings true,” says Janet Cowperthwaite, the manager of the Kronos Quartet, when asked about Little’s comments. “When you consider the amount of streaming versus the dollars with it, it’s totally not comparable with buying CDs and vinyl or even downloading. Artists are not in a very good position financially with Spotify. It’s almost like you have to think of it as a marketing platform.”

Streaming accounts for about 12 percent of Kronos’ recorded-music distribution, though soundtracks, such as that for Requiem for a Dream, can receive double that amount.

How Streaming Payments Work

Under the current model, Spotify doesn’t pay artists per stream. Instead, all of the revenues from subscriptions and advertising are gathered in a single pot. Using a complex formula, the company divvies up the money among all artists (and their labels and publishers) as a fraction of the total streams for a given period. Receiving more streams does not entitle a musician to proportionately larger payments; it simply allows them to receive a slightly larger slice of the total rights-holders’ pie.

The model can be understood through an analogy. Imagine if only a single person used Spotify in a given month and listened only to the Kronos Quartet’s recording of Berg’s Lyric Suite a single time. Accordingly, that one click could bring Kronos the whole pot of money—millions of dollars—as long as everyone kept paying their $9.99 subscription fee and advertisers kept buying commercials.

With every artist vying for the same pot of money, streaming platforms favor music “that is designed for mass audiences or for lots and lots of repeat plays,” says Kevin Erickson, director of the Future of Music Coalition, a nonprofit think tank and advocacy group based in Washington, D.C. “So musicians and composers that are doing work that is designed to offer a more immersive and transformative listen are likely to see the least amount of direct financial benefit from these services.”

Erickson says that the problem stems in part from a lack of competition among big tech companies, which his organization is addressing by lobbying for regulatory reform. At the same time, musicians must be willing to direct their fans to alternatives. He cites Bandcamp, the platform that allows artists to sell music in virtually any format, set their own prices, and offer fans the option to pay what they wish. Bandcamp takes a 10 to 15 percent cut on sales. Since March, the company has presented Bandcamp Fridays, in which it waives its revenue share on all purchases.

“Why don’t we have 20 different Bandcamps?”  Erickson asks. “What is the barrier to entry for more and diverse kinds of music-delivery services? Why are these one-size-fits-all models propagating? There are some dynamics that are just inherent in the way that scale works on the internet. But there are also just competition problems.”

The classical-focused platforms Idagio and Primephonic address this with a pay-per-second model: royalties are paid based on the number of seconds users spend listening to tracks rather than by track clicks themselves. Additionally, Idagio says it does not pool subscriptions, but distributes a given subscriber’s fee based on which tracks that individual has streamed.

Working with the System

Plenty of string players not only use Spotify for their personal listening but welcome its professional utility. In May, cellist Matt Haimovitz released CelloJazz, a 28-track compilation, through his label, Oxingale, and made it available only through streaming services. “I was very skeptical about streaming,” he says. “Artists are getting just a fraction of a penny for each play. But I have to say that I feel very differently about it now. I think streaming has been fascinating in terms of the scope and reach and the sheer numbers of people involved.”

Haimovitz says he especially appreciates the ability see where his fans are listening from (Mexico City and Istanbul top the list), how engaged they are, and the pieces that are getting traction. Among his most-streamed tracks, at nearly 800,000 plays, is an arrangement of Radiohead’s “Pyramid Song,” which he recorded with pianist Christopher O’Riley. The hope, he says, is that some Radiohead fans will migrate to his Bach recordings.

Violinist Lara St. John is another musician who runs her own label, Ancalagon, and sees streaming platforms in a mostly positive light because of their reach. “The negative about it is it’s an incredibly small amount of money,” she admits. She estimates that if her streamed tracks were converted, they would equal 500,000 CDs, “and everybody would be doing a whole lot better.” But CDs only sell at concerts, she says, and ultimately, her aim is exposure.

“When I create a product, I want people to hear it,” she says. “There’s no sense in being creative if nobody hears you. A Bach sonata that I played with harp has 170,000 plays on Spotify. Where else is that going to happen? I’m not sure what the rhyme or reason is but, honestly, I’m just happy people are listening. Classical music recording has never been a money maker.”

But other independent label owners say that the streaming payouts are inadequate for their business models. London-based Hyperion Records has withheld its catalog from streaming platforms with the exception of Apple Music, and that is only because Apple bundles it with iTunes, the download store, says label director Simon Perry. “Everybody reads about how brilliant streaming is for the record business,” he says. “It’s not. We spent £1.4m pounds [about $1.8 million] last year just to get the audio made. I’ve got to generate the income from sales to pay for that audio. If I turn on streaming, I’ll never pay for that.”

Perry notes that a recording on Apple Music only reaches a significant audience if it appears on a playlist, many of which focus on background listening, with themes like relaxation and concentration. Hyperion’s most-streamed album of the last three months is a performance of Beethoven’s “Emperor” Concerto by pianist Stephen Hough, conductor Hannu Lintu, and the Finnish Radio Symphony Orchestra. It has garnered some 36,000 streams, or the equivalent of just 36 CDs (stream-to-CD equivalency models vary by country and type of subscriber).

Of Hyperion’s top 100 most-streamed recordings on Apple Music, 99 of them are piano based, says Perry, because the service has placed them on piano-themed playlists. But the vast majority of the company’s recording revenue—96 percent in August—still comes from CDs and downloads.

What Comes Next?

Some musicians have begun to organize through groups including the Union of Musicians and Allied Workers (UMAW), a new association that is focused on a host of concerns, including streaming payouts. Though it has not yet formalized a set of demands, a group representative, Joey DeFrancesco, believes that “the only way to change this is to have massive collective action and have thousands of workers taking action.”

But string players may feel that resistance is pointless when faced with tech Goliaths that provide such a clear value proposition to their listeners. Spotify’s monthly cost of $9.99 is a remarkably small amount to pay for access to more than 60 million tracks and 1.5 million podcast titles. Even if Spotify agreed to pay out 100 percent of its revenue to musicians, the payments would still be paltry. As Pitchfork estimates, Little’s $15.50 could be multiplied by 10—“a factor which would far exceed Spotify’s total revenue if it were applied to its entire catalog”—and she still would receive just $155.

“It seems unlikely that there’s going to be one silver bullet,” says  Erickson of the Future of Music Coalition. “More artist mobilization is great. More communication between artists and their listeners is really important because that informs consumer choices and opens up possibilities. If everybody rallies around ‘Spotify should just pay more,’ they’re not going to do it.”

But Little plans to keep speaking up. “A great many performers are worried about ‘rocking the boat,’” she writes. “This doesn’t worry me and, as a soloist, I am not beholden to any one organization.” It is perhaps telling that Little’s website is dotted with references to CDs, a format she acknowledges once produced enough royalties to offer “a nice supplement” to her income. “Now [those royalties] are negligible as so few people buy CDs. So the whole nature of how musicians are compensated must be re-thought. Something has to change.”