This is a story without bold names, or at least not the kind you usually read Vassar of vanity.
And yet, it is the story of more than 28,000 musicians and workers in the music industry and some of the world’s largest corporations.
At the beginning of the pandemic, when live music was shut down, a group of independent musicians and music workers began meeting weekly on Zoom to share ideas on what we could do to improve the dire situation we faced. From those meetings grew a new advocacy organization, the Union of Musicians and Associated Workers (UMAV). And among the actions taken by UMAV was a review of the economics of streaming music. From the ground up, you might say – what it looks like to actual working musicians.
Streaming dominates the recorded music industry—it’s now responsible for 83% of all recorded music revenue in the US, according to the record label association RIAA. The remaining 17% includes every other use of recorded music imaginable: not just physical sales and digital downloads, but also film and TV soundtracks, and advertising and brand licensing. There simply isn’t much to do with recorded music outside of streaming.
The problem is that streaming has a hard time paying recording artists. Currently, there is no direct payment from streaming platforms to the musicians themselves, such as, for example, from satellite radio. The average per-stream royalty paid by platforms to rights holders (ie, record labels) is $0.007, gross, according to the National Bureau of Economic Research, and labels generally keep between 50% and 85% of those revenues. As a result, it takes tens of millions, if not hundreds or thousands of millions of streams for artists to make anything like a living wage from their streaming. Many artists no longer see any income from their recordings.
Meanwhile, streaming platforms themselves are booming — their revenue is set to grow 24.3% in 2021, to a total of $16.9 billion. Paid streaming is dominated by just a few corporations. According to market researcher MIDIA, Spotify is by far the main player with 31% of the market, more than double its nearest rivals Apple (15%) and Amazon (13%). Add in Chinese media giant Tencent (13%) and Alphabet/Google’s YouTube subscription service (8%) and you have 80% of total streaming subscription revenue controlled by just five corporations, including several of the world’s richest.
Notice that only one of these corporations would even call itself a music business — and that’s probably only temporary. Here’s Spotify co-founder and CEO Daniel Eck speaking to his investors earlier this year, as quoted Diversity:
“The best companies — I think you’re all familiar with the names — are a lot different today than they were when they started,” Eck said. “They made their initial mark in one specific category: books.” [Amazon]Search [Google]desktop computers [Apple]. And then they redefined the way we think about those categories by expanding their potential through innovation… And this is exactly the same journey we’re on.”
Ek’s points of comparison are not accidental. They are its closest competitors in American and European music streaming. Spotify’s recent investments in podcasting, sports and games make it clear how much music is ultimately about the company – its corporate statements now refer to “audio” instead of “music”.
In other words, recording musicians have become completely dependent on businesses that seem to have little or no interest in the future of recorded music. Those jobs grow while the musicians get sick.