The music industry is on its knees. In the U.S., the events industry has totally collapsed without any clarity on when things will pick back up again. From cruises, to weddings, to live shows at venues, the live music opportunities are gone. With musicians making 80% of their income touring, it’s a huge concern that Live Nation has indicated they have lost 97% of their total income. 90% of music venues — worldwide — are looking like they might collapse with no return.
Who do we turn to?
When Daniel Ek launched Spotify in 2002, he said he launched it to combat piracy and earn a living wage from their music. Yet, just last week, he indicated he is going to put his billions into investments in other sectors outside the music industry.
Let’s dig in on just how little Spotify is helping artists present day. To earn minimum wage as a musician/artist on Spotify today, you have to be streamed 3,000 per hour, or 20,000 times per day, or 100-150k per week. To make this clear, that totals six to seven million streams annually for an artist to earn minimum wage. This is what those numbers look like for a solo artist who owns their master, publishing, and every other creative property utilized in distributing music. Spotify pays $0.0038 per stream. They could double their pay-out and still wouldn’t even be paying a PENNY per stream.
When pushed on this in August 2020, Ek told Marketwatch, “Some artists that used to do well in the past may not do well in this future landscape, where you can’t record music once every three to four years and think that’s going to be enough…I feel, really, that the ones that aren’t doing well in streaming are predominantly people who want to release music the way it used to be released.”
The reasons musicians want to release music the way it used to be is because they got paid freely. This isn’t about release cadence and any PR team who gave Ek that statement is out of touch. Before Spotify, artists had to deal with their label (if they had one), and now we have to fight against greedy labels, distribution, and Ek telling them to churn out music weekly. The problem isn’t that musicians don’t work hard enough, it’s that they are set up to be unable to make a liveable wage no matter how hard they do work and no matter how high quality their work is.
The truth is that Spotify generates quarterly profit — billions regularly. Where does that money go? After the streaming services pay out, the label gets the biggest share. According to TechDirt, and verified by numerous other services, the breakdown looks like this:
As you can see, the labels get the lion’s share, with songwriters/publishers splitting 10% and the performers getting less than 7%. And, if you look at the specifics of the actual post-tax payout, you can see the contrast more starkly:
Most streaming services only give pay outs for a stream if the listener gets past the thirty second mark. Roughly 50% of all listeners hit the skip button in under ten seconds.
The labels and corporate side of music are also a piece of this puzzle.
There is nothing on the horizon coming to save us. The only thing that will save the music industry is the creators themselves coming together and demanding immediate change.