The ‘broken record’ streaming debate that continues to rage on is a natural consequence of the instantaneous collapse of live music revenue following lockdown. As soon as it was clear that live was going to be gone for some time, MIDiA predicted that the artist backlash against streaming royalties would be a natural, unintended consequence.
With many artists used to live comprising more than half of their income and streaming by contrast a sizeable minority, it was easy for them focus less on whether streaming paid enough and more on how many extra fans it was bringing to their concerts.
In the absence of live, all eyes are on streaming. As I’ve written previously, there isn’t a silver bullet solution to what is a complex, multi-layered problem. But there is a really important issue that artists’ lockdown plight shines a light on: the long-term plight of songwriters. Here’s why.
Streaming did not grow in a vacuum
The streaming economy did not grow in a vacuum. It rose in the context of a thriving wider music industry where artists were earning good money from live, merch and (for some) sponsorship. Nor did streaming ever consider its relationship to live as being neutral. Spotify in fact is vocal in its belief that it ‘supports and extends the value of live’.
This matters because it encourages artists to think about streaming delivering a wider set of concrete income benefits than the royalty cheque alone. The streaming case is that without it, artists would be playing to smaller crowds and selling less merch. A high tide raises all boats.
Without the halo effect benefits though, artists would have found it much more difficult to adjust to the shift of paradigms from a series of large one-off income events (i.e. selling albums) to a longer-term, more modest monthly income, namely trading up front payments for an annuity. Artists would have found it as difficult as…well…as they are now. This is how it feels not to have live music and merch paying the bills. This is how it feels to be a songwriter.
Songwriters only have the song
Professional songwriters (i.e. not those that are also performing artists) may have many income streams (performance, sync, mechanicals, streaming) but they all depend on the song. The songwriter lives in a song economy. The artist lives in a performance/ recordings/ clothing/ collectibles/ brands economy. Songwriters do not tour or sell t-shirts. As a consequence, they have been paying closer attention to streaming royalties over recent years than artists have. Now that artists are also unable to tour or sell shirts (at least in the same volumes) streaming royalties suddenly gained a new importance to them also.
The good news for artists is that live will recover (though it will take until late 2021 to be fully back in the saddle). The bad news for songwriters is that there is no easy or quick fix and things will get worse before they get better. One of the key imbalances is in streaming. Music publisher revenue is around 2.8 times smaller than label revenues but streaming royalties are four times smaller. As streaming becomes a progressively larger part of the wider music economy, if the current royalty mix remains, songwriters will earn a progressively smaller share of the total.
A generation of whom much is asked
Artists are fighting an important fight now, but when live picks up post-lockdown, songwriters will still be fighting their fight. This is not to in any way diminish the importance of artists getting a fairer share from streaming services and record labels, but it is to say that much of their pain will ease when their other income streams come back online.
Be in no doubt. Songwriters have a long and windy road ahead of them.
Songwriter’s streaming era plight reminds me of Franklin D. Roosevelt’s 1933 quote:
“To some generations much is given. Of other generations much is expected.”
But just as streaming does not exist in isolation, nor do songwriters. They are the foundations of the entire industry. There is a well-used saying that ‘everything starts with the song’. It doesn’t. Everything starts with the songwriter.
Quick reminder: if you are an artist and you haven’t yet taken our artists survey, then there is still time! We are keeping the survey live for a few more days. All individual responses are 100% confidential. All artists get a full copy of the summary survey data so you can benchmark yourself against your peers, including how they are dealing with the impact of COVID-19. The survey questionnaire is here.
Music Industry Blog 
Mark – I wrote a long comment but I’m not sure it went through. Please let me know. Thanks. Jody Dunitz
Sent from my iphone.
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For decades, labels have tried to justify why their contribution to a finished record warrants the lion’s share of revenue collected from sales (or streaming) and why the song’s contribution is tantamount to an expense, a minor cost of doing business.
A few years ago, Wikileaks leaked internal emails from Sony Music. Among those was one from an executive who was concerned about the growing demand for increasing compensation to songwriters. The exec explained the label’s point of view:
“….When we record a song, it seems to me that our role is more like that of the film company in that we fund and direct the entire process of turning words on paper into a fully realized entertainment experience. And the song/songwriter is more in the role of the screenplay/screenwriter – incredibly important and fundamental to the film, but one element in a collaborative process. Just as the film company hires the actors and director, pays all the production costs and funds all marketing efforts, so does the record company (albeit on a smaller scale) fund the recording and marketing….”
This is nonsense. 1). The label does not hire the songwriter. The screenwriter is hired for his or her services and is paid, upfront, prior to release, for services rendered, and often receives a percentage of profits. In contrast, the songwriter receives no upfront payment; his or her compensation is based solely on the sales of records. No sales, no money. 2). The screenwriter’s compensation is set by well negotiated union contracts, which define minimum payments; individual screenwriters often receive sums well in excess of the union minimums. In contrast, the song royalty is set under the Copyright Act and the labels never pay a royalty in excess of the statutory rate. 3) A screenwriter must edit his or her script to please the producer or studio. The label has no involvement in the creation or edit of any song.
The labels do, however, invest lots of money to advertise and promote records. So, what economic cost should the songwriter bear for those ad dollars? Should that cost equate to a reduced share, in perpetuity, of a royalty stream that should otherwise be allocated to the song?
That’s today’s business model — even where the record label is no longer spending money to advertise a record or where advertising costs have long been recouped from profits of a successful record or where the product has been depreciated and tax benefits obtained.
The songwriter takes a royalty hit forever – even though there is literally no music without a song.