Most UK music consumers believe that streaming services underpaid artists

Gray wants more for artists than just a larger portion of the royalties. “This is not about fairness,” a word that has become “meaningless” in the efforts of artists to raise royalties, he says. Gray, front man for rock group Gomez, wants to change the factors that determine license fees. “This is about big structural economy,” he says. Gray initially suggests that subscription services increase their prices.

The custom subscription price – $ 9.99 / EUR 9.99 / £ 9.99 – has been unchanged for over a decade. Actual revenue per subscriber is much lower. At Spotify, the world’s largest payer of streaming license fees, the average revenue per user dropped from € 4.89 ($ 5.78) to € 4.41 ($ 5.21) between 2018 and 2020, with everyone paying to rightsholders Royalty was effectively watered down. Student discounts bundled with telecommunications services and family accounts – up to six people on a single account – are contributing to declining per capita revenues. If cost of living adjustments were applied to the $ 9.99 price for the past decade, the standard rate today would be $ 11.70.

# BrokenRecord’s survey found around a third of those surveyed would Pay a higher price if the money only went to the artists who streamed them. The services currently bundle the subscription fees of the creators and pay license fees on a pro-rata basis. The track most streamed receives the largest share of royalties. However, respondents prefer a user-based billing method that pays off just the artists that the subscriber has streamed. It is more equitable for artists in genres with no broad appeal such as jazz, heavy metal, and classical.

The publication of the survey results coincided with the launch of an investigation by the UK Parliament into the impact of the economics of streaming music on artists and record labels. The committee that oversees digital businesses will consider whether the government should help develop fairer “business models”. Gray suggests separate license fees for passive and active hearing. The royalties from a stream of a playlist or radio station would be collected by a collecting society – SoundExchange in the US – rather than through their record labels. That would be a big break with tradition. Current license agreements pay license fees to distributors – some labels have direct license agreements with streaming services – which the record labels pay for. The license fees then go to artists who are not in debt to their labels.

It is unlikely that the US Congress will enforce or discourage one business model over another. The startups’ approach of “growth over profit” is anchored in American capitalism. Take Amazon, which is known to prioritize profits as a result of growth. Now, of course, profits come from its dominance in many aspects of e-commerce. With digital startups, investors accept deep losses in exchange for growth and market share. Most famously, Amazon hasn’t made a profit for nearly a decade. Investors steadily accepted low profits while Amazon invested in itself.

It is unlikely that there will be any basic consumer-led movement. Music consumers have a long history of knowingly buying – and now streaming – recordings that have been marked by financial controversy. In the 1950s and 1960s, Atlantic Records executives had a reputation for not paying royalty and earning undeserved songwriting credits. Singer Ruth Brown, one of Atlantic’s most popular artists in the 50s and 60s, fought the label for unpaid royalties for 20 years. While Brown testified in a 1986 Congressional hearing about Atlantic’s “creative” accounting, her lawyer appeared on national television to raise public awareness. Atlantic Finally, Atlantic funded a foundation that gave grants to landmark R&B artists. But for label co-founder Ahmet Ertegun, a well-respected figure in music history, the controversy is a tiny star in a fabled career.

Gray counters by saying that modern consumers hold companies accountable for the treatment of workers. “The appetite for ethical business [and] The ethical investments and the progress are enormous, “he argues. That’s true. The Americans were horrified to learn of the poor working conditions in the factories of some Apple suppliers in China. Apple had no choice but to ensure that the products were being sourced ethically. People will pay more for fair trade coffee beans and expect automakers to make affordable electric cars. Record labels and streaming services could next change their business practices.

Some record companies are making small, incremental changes to royalty billing. BMG announced last week that it would end the “controlled competition” clause, which reduces the release fees a label pays its record artist for selling physical formats. When a recording artist writes the songs on an album, record labels require a 75% rate of a maximum of ten tracks. Hartwig Masuch, CEO of BMG, described the clause as “solely intended to reduce the income of musicians”. Gray simply calls the clause “hideous” and praises BMG for “breaking the mold and wanting”[ing] to act ethically. “BMG is not going to sacrifice much to play Devil’s Advocate, as the average artist generates almost all of their sales from digital formats that are not subject to the clause.

But the public has not blamed record labels for their businesses. Instead, the excesses of the record industry in print, television and films have been curbed. The Internet has helped spread artists’ criticism of record label practices in ways that have not been possible in decades past. Courtney Love’s well-read article from 2000 broke the numbers down in a recording deal and compared the artist’s experience with “sharecropping”. More recently, Radiohead left Parlophone Records in 2007 and independently released albums – including a groundbreaking “Pay What You Want” offering for the 2007 album, In rainbow. Radiohead vocalist Thom Yorke called Spotify “the last desperate fart of a dying corpse” in 2013 when the band’s catalog took a three-year hiatus from the service’s catalog.

A final option for royalty reform would come for investors – namely, Spotify’s shareholders. “You’d hope that someday you would wake up,” says Gray. Institutional investors – including T. Rowe Price, Morgan Stanley Investment Management, Tiger Global Management and BlackRock Fund Advisors – “need to know that this is not an ethical investment.”