Transparency of reporting to artists, or lack thereof, has contributed to a poor signal-to-noise ratio in the streaming debate. Instead of a clear picture of what streaming brings to artists and songwriters we have been left with a dizzying array of conflicting statistics that in turn has resulted in a bewilderingly diverse set of artist opinions. Spotify today announced the first move towards remedying this situation with artist self-serve analytics, as well as stating its exact range of payments per stream (which for the record are between $0.006 and $0.0084). The impact of these moves may be slow to be felt but they will be of truly seismic proportions, and here’s why.
In the digital era, with such an increase in both the volume and granularity of data from digital services, the issue of transparency should have lessened but has paradoxically become more intense than ever. This is because the greater the depth of data that artists get from other sources (web site and Facebook analytics, CD Baby reports etc) often contrasts strongly with how much detail artists get from record label accounting. Assumptions and allegations about accounting procedures and commercial agreements that affect how much artists and songwriters get paid have always been just that, assumptions and allegations. In addition to contractual and accounting issues that blight some artist relationship, many labels – and not just majors – can pay as little as 15% royalties to some artists for streaming. But without clear and transparent accounting, no one quite knows exactly what goes where nor at what rate.
Now that Spotify has introduced self-serve analytics, artists will be able to start to create a robust understanding of just how many plays they have received and to then compare this with what is reported back to them by rights owners. And if it doesn’t match up with what the labels pay them then artists will be able to use discrepancies as a basis for requesting sales audits from their labels. Expect a building wave of account audits with the onus on the labels to use this as the catalyst for striking a new generation of improved, more transparent streaming deals for artists. Normally the ‘anomalies’ that come out of audits are swept under the carpet with artists securing pay outs in return for signing NDAs. That cycle needs to be broken for streaming related audits. Hopefully labels will choose to change the systems rather than expend non-scalable audit effort on a surge of streaming-driven audit activity. Ultimately it is in the interests of labels to have artists on board with streaming. It is much easier to persuade artists to become part of the solution if their earnings are not hidden behind obscure accounting.
Spotify was getting tired of being painted as the bad guy in the transparency debate with its hands tied by confidentiality deals with the labels. Now Spotify are extricating themselves from the debate, giving artists the tools with which they can engage in direct conversations with labels. If artists genuinely feel that they are part of a community, then there is as much onus on them as there is on the labels, to sacrifice individually beneficial audit settlements that commit them to omertà in favour of pouring data into an open debate. Otherwise all that will happen is that artists will perpetuate the lack of transparency, banking a nice cheque to buy their silence once they discover the skeletons in the closet. Over to you artists…