There's two amazing pieces on Medium by a dude named Sharky Laguana about how to fix streaming music. You know the problem: Artists are paid fractions of pennies per stream through services like Spotify and Apple Music, but at the same time, these platforms are an amazing way to discover new music and be discovered by new fans. I HIGHLY recommend reading Sharky's pieces, but first, read what I wrote as a script for an upcoming vlog on the subject! Please!
Sharky does a great job of simplifying a complex subject, and I tried to go even further so that the message can reach as far and wide as possible. Tell me what you think!
______________________________________________________________________
DISCLAIMER!
This video is about the royalties generated by online streaming services. It’s a really complicated topic. Sharky Laguana, a musician and writer, wrote a series of posts on Medium which I’m using as the basis for everything that I’m about to say. His piece simplifies and illuminates this complex subject and I’m going to be simplifying it even further. There’s lots of data to back all of it up, though, so click the links in the description and look out for more posts by Sharky.
The question at the heart of all of this is: Is there a way to make streaming services be more fair to musicians? Let’s get into it.
Spotify makes the vast majority of it’s money from the over 10 million people that send them $10 a month to listen ad free. When you pay that $10 a month, almost none of it goes to the actual artists you listen to. Lately on Spotify I’ve been listening to a ton of Eef Barzelay, who strangely enough I discovered from a yogurt commercial. Anyway, I’d love it if a huge chunk of my recent subscription fees went straight to him. I’m a big fan. Unfortunately though, that’s just not how it works.
What Spotify does is they put all my subscription money, and yours and everybody else’s into a big pool, they take a 30 percent cut, and then earmark the rest for royalties. How is the rest divvied up? This bag of royalties is divided by the total number of streams across the entire service in the given period and this gets us a number called the “per-stream royalty rate”. Multiply my # of streams in a month by this per-stream royalty rate, and you have the amount I’m paying out to artists.
This big pool system has a bunch of problems, but I’m going to focus on my perspective as both a fan and a musician. Not only does this method of royalty distribution mean that I have absolutely no control over who gets a piece of my hard earned $10 a month, it also means that if you’re a “typical listener” like me, who streams around 300 tracks a month, I actually end up subsidizing a “heavy listener” who’s streaming 1000 or more tracks a month. I end up paying for someone else’s musical taste. Let’s look at how this works.
Out of my $10 subscription fee, $3 goes to Spotify and that leaves $7 to go to royalties. Let’s say I listen to 200 tracks this month. Based on the per-stream royalty rate we established above that means I’ve generated a cool $1.40 to be paid out to artists. But wait - $7 out of my original $10 was earmarked for royalties, I generated $1.40 with my 200 streamed tracks, so that leaves $5.60 hanging in the balance. Where does that money go?
It goes to subsidize a heavy listener, who’s streaming, say, 1800 tracks that month. They pay the same $10 subscription fee as everyone else but they’ve generate $12.60 in royalties, which leaves them $5.60 short. Oh look, I have $5.60 left over. Boom - I just paid for someone else to listen to Nickelback.
I wanted my money to go to an semi-obscure indie artist I’m currently obsessed with, who I’ve listened to almost exclusively this month, and instead my money went to Nickelback, and god knows who else. Probably, based on nothing else than sheer number of streams, a bunch of artists in the top 40. The system is broken.
Often these heavy listeners aren’t even individuals, but offices and yoga studios and restaurants who just have music as background 24/7. They pay the sam 10 dollar sub fee, but because they’re such heavy listeners they dictate, in a very real way, how the money gets divvied up. I don’t want to be paying for the artists these companies put on their playlists.
There is a better way. In his multiple Medium posts, Sharky calls it the Subscriber Share Model. It’s pretty simple: Spotify should just divide up my $7 based on who I specifically listen to that month. So if I listen to Eef 100% of the time in a given month, he’ll get my entire $7. If I listen to The Spinto Band 25% of the time, they’ll get $1.75. Compare that to the big pool: If I listen to 200 tracks in a month, and 50 of those streams are The Spinto Band (25% of 200 is 50), based on the per stream royalty rate, they stand to make only $.35.
The Subscriber Share Model is a fantastic idea. As Sharky says in his Medium post: It honors the intent of the listener, and incentivizes getting more fans, bringing the goals of everyone (services, labels, artists and fans) into alignment.
Spotify isn’t likely to do this anytime soon. But Sharky has an answer for that, too. He’s come up with the idea for a protest called Silent September. Normally, it’s impossibly for a typical listener to keep up with the heavies - the business that keep the music pumping all day. So the idea for the protest is this: For the month of September, turn your volume down really low, and keep your streaming service of choice going 24/7 with a playlist of indie artists you love on repeat. Streaming services can’t tell when your volume is down, and if you have a big playlist of artists on repeat, it won’t trigger any alarm bells. There’s nothing they can do to stop you. If you’re a typical listener and you do this for even just a day, it will double your monthly listening. Doing it for a week will result in more streams than a typical listener does in a year! If enough of us do this and we we focus on the indie artists we love, the major labels will start to worry about their piece of the big pool pie decreasing. That’s when they’d really take notice at just how unfair the current system for distributing royalties is.
I’ve made a playlist in both Spotify and Apple Music of the artists I’m going to be streaming for the month of Sept. Let’s make this happen!!
View all 4 comments
Chad Ostrowski I think your series sounds like a great idea! I think lots of people would be willing to pay a small fee for that.
August 17, 2015 12:24:06 · Reply
Jonathan Mann <3 Awesome! Going to do a brain dump today.
August 24, 2015 12:15:15 · Reply
erin gately I am sitting in a hotel in Newark listening to the podcast and you just said you live in Jersey City. 👋🏼 That is me waving hello from Newark. I like the idea of you continuing the series of how to write a song a day. Have a great day!
August 17, 2015 13:12:29 · Reply
Jonathan Mann Hello!! Just getting this wave! <3
August 24, 2015 12:15:04 · Reply