15 Mar Fix Streaming Campaign // Major milestone for SoundCloud announcing “fan-powered” artists payments
By noisyhype team, March 03, 2021
We are listening to more music than ever. In 2020, streaming, which counted for more than 80 per cent of all music consumption, was up 20 per cent on the previous year. But musicians aren’t seeing the financial benefits.
One Spotify stream has an average value of around £0.004 – which goes to the label, or the song’s rights holders. An artist, if they have paid off debts to their label, might receive 20 per cent of that (according to a traditional 80/20 record deal), amounting to roughly £0.80 per 1,000 streams.
The streaming model has been broken for years and it is getting worse. It must be fixed by building an equitable, sustainable and transparent model.
MU General Secretary Horace Trubridge and The Ivors Academy CEO Graham Davies gave evidence in the fifth session of the music streaming inquiry.
Re-classification of Streaming
‘Making available’ is the majors labels definition as ‘streaming’, and allows them to deal directly with the platforms keeping the revenue instead of guaranteeing fair income streams to the creators.
For Horace, top ask, is to reclassify streaming as ‘communication’ to the public. “That way, the money is split 50/50 between the record labels and the artists,” told MPs.
Reckognize song’s value
More streaming revenue should go to songwriters. Graham stated that “streaming is a song economy” based on songs listening rather than albums.
Major publishers happen to be owned by major labels that pay out way less than publishers. It’s in the interest of labels to keep the value of the song below 15% of the overall pot.
Creators are struggling while major labels make millions
“Those that are suffering most from the current arrangement, who see the least of the money would absolutely be the music creators,” Graham told MPs on the DCMS Select Committee.
“I think that this inquiry has been very well received by our community because there’s an increasing lack of trust in the system, understanding where monies really are going… And I think that’s feeding through into consumer trust eroding as well,” he said.
“The only way to make any money from recorded music these days is to work for a record label,” Horace added.
Sound Cloud transition to “fan powered”
SoundCloud announced Tuesday it will become the first streaming service to start directing subscribers’ fees only to the artists they listen to, a move welcomed by musicians campaigning for fairer pay.
“Many in the industry have wanted this for years. We are excited to be the ones to bring this to market to better support independent artists,” said Michael Weissman, SoundCloud’s chief executive officer, in a statement.
The company said the new payment system — known as “fan-powered royalties” or “user-centric model” — would empower listeners and encourage greater diversity in musical styles.