Tag Archives: recording artists

Royalty rates paid musicians decline for some streaming services

When it comes to getting paid, the bigger streaming service is not necessarily better for most musicians and song writers.

While the revenue and market share have grown for the leading streaming services, some significantly, the royalties paid to artists have been declining.

According to a recent article in The Trichordist, a publication dedicated to the protection of artists rights in the digital age, streaming royalties paid to artists declined in 2017.

The blog took snapshots from a major indie portfolio for 2017, 2016 and 2013. It found that “when streaming numbers grow, the per stream rate will drop.”

This data set is isolated to the calendar year 2016 and represents a label with an approximately 150 album catalog generating over 115 million streams, a fairly good sample size. All rates are gross before distribution fees.

Spotify was paying .00521 back in 2014, two years later the aggregate net average per play rate dropped to .00437 in 2016, a reduction of 16%, reports the Trichordist. The current effective per stream rate at Spotify has now dropped to 0.00397, a reduction of 9% since last year. This a cumulative reduction of 24% since 2014, which is an average decrease of 8% a year of the per stream rate.

Business Model Questions

“If the music business could set a per stream rate that allowed revenue growth, proportionate to consumption growth that would be a much better model,” said David Lowery, editor of The Trichordist and leader of the band Cracker and Camper Van Beethoven. Lowery teaches in the Music Business Certificate Program at Terry College of Business, University of Georgia.

A notable change from last year is that Pandora replaces YouTube with the greatest value gap of streams at 21.56% volume with only 7.86% of revenue. YouTube drops to 8.38% of volume with only 1.70% of revenue.

Indie Label Sample: 115 Million Streams

Top Players

Apple appears to be the lone streaming service that is growing both in market share and revenue, and is paying relatively high royalties. It accounts for 22.29% of the revenue on 10.48% of the streams, and pays approximately six-times the per-stream royalty rate of Pandora. (Apple’s iTunes is a direct purchase model, while Pandora offers a more radio-like format, which precludes on demand listener selection.)

More than 95% of the streams and 98% of the revenue were concentrated in the top ten companies. The top three, Spotify, Apple iTunes and Pandora, comprise about 80% of the streams for this representative catalogue and 82% of the total streaming revenue.

For The Trichordist‘s 2017 streaming sample, go here; 2016, here; and 2013 here.

Image source: thetrichordist.com


EU copyright reform – A leap forward or step back?

Reforms to copyright law proposed last week by the European Commission would put the burden on Internet companies like Google, Facebook and YouTube to prevent online piracy and compensate content providers, like music companies and news providers. 

In a shift in policy the proposals issued by the European Commission would require websites that host video and stream music to shoulder more responsibility for rooting out copyright infringements.

Under the current rules, reports the Financial Times, YouTube, Facebook and other video platforms remove material on a case-by-case basis only after being notified by rights-holders. If adopted, the proposals would require them to run proactive software checks to determine whether content they are hosting contained copyright material.

Preventing Piracy

The European Commission proposal is intended to prevent piracy, which has haunted the music industry and recording artists which has shed more than 60% of its value since 2000, and to prop up content providers like newspapers and magazines, which have seen declines in print circulation.

leaked-copyright-communicationThe reforms aim the foundation of a long-running fight between struggling traditional media companies — from record labels to newspapers — and the technology groups that increasingly dominate online media.

Critics say the EC is seeking to shift the responsibility for identifying copyrighted content by requiring Internet companies that host user uploaded video, such as YouTube and Facebook, to proactively check for copyrighted material, rather than waiting to receive a take down request from a rights holder.

Industry trade publication TechCrunch reports that “The draft directive also includes a proposal for a new right for news publishers covering digital use of their content for 20 years. Unsurprisingly, Google is not a fan of this.”

This extended right is similar to ancillary copyright laws already enacted by governments in Germany and Spain which target search engines displaying snippets of news stories.

Mandatory Fee

The law as enacted in Spain included a mandatory fee for displaying snippets, one line summaries from publishers, and led to Google to pull its Google News service in the country. While many Germany publishers waived their rights in favor of retaining the traffic Google sends their way.

Whether YouTube’s free site is directly competing with paid services such as Apple Inc.’s Apple Music and Spotify AB is a matter of debate, reports the Wall Street Journal. According to a YouTube spokeswoman, “users come to YouTube to watch all kinds of different videos. The average YouTube user spends an average of an hour a month consuming music, far less than music-only platforms.”

The European Commission’s proposals, which come after a three-year review aimed at updating copyright law for the digital age, could take years to ratify. The proposals have been—and are likely to remain—the subject of heavy lobbying from copyright holders like record labels and newspaper publishers on one hand, and technology firms on the other.


It will be interesting to to see if the EU will be successful in rolling back what Internet users have come to believe is free content that until now has not been seriously policed.

A draft of the proposed EU reforms can be found here.

Image source:1709blog.com; openforumeurope.org

%d bloggers like this: