Forgot your password?
typodupeerror
Businesses Music Piracy Your Rights Online

As Music Streaming Grows, Royalties Slow To a Trickle 665

Posted by Soulskill
from the go-big-or-go-home dept.
concealment sends this excerpt from the NY Times: "Late last year, Zoe Keating, an independent musician from Northern California, provided an unusually detailed case in point. In voluminous spreadsheets posted to her Tumblr blog, she revealed the royalties she gets from various services, down to the ten-thousandth of a cent. Even for an under-the-radar artist like Ms. Keating, who describes her style as “avant cello,” the numbers painted a stark picture of what it is like to be a working musician these days. After her songs had been played more than 1.5 million times on Pandora over six months, she earned $1,652.74. On Spotify, 131,000 plays last year netted just $547.71, or an average of 0.42 cent a play. 'In certain types of music, like classical or jazz, we are condemning them to poverty if this is going to be the only way people consume music,' Ms. Keating said. ... The question dogging the music industry is whether these micropayments can add up to anything substantial. 'No artist will be able to survive to be professionals except those who have a significant live business, and that’s very few,' said Hartwig Masuch, chief executive of BMG Rights Management."
This discussion has been archived. No new comments can be posted.

As Music Streaming Grows, Royalties Slow To a Trickle

Comments Filter:
  • Not a bad start. (Score:1, Interesting)

    by Anonymous Coward on Friday February 01, 2013 @06:12PM (#42766671)

    'No artist will be able to survive to be professionals except those who have a significant live business, and that’s very few,' said Hartwig Masuch, chief executive of BMG Rights Management."

    Personally, that's what I would like to see. That's why I support live music.

    I don't think streaming should be free, but considering how many times Pandora plays the same song during a workday based on my "seeds", I can see that adding up if you're even marginally popular. And did an "avant cello" player really expect to be in the same income bracket as the Rolling Stones. How popular is she in other media... really?

  • Re:Not a bad start. (Score:5, Interesting)

    by Knuckles (8964) <knucklesNO@SPAMdantian.org> on Friday February 01, 2013 @06:28PM (#42766877)

    There is music that cannot be played live, or which does not work in a live setting, and which is still worth having (as a cultural contribution to humanity, I mean)

  • Pandora's fees (Score:4, Interesting)

    by Jah-Wren Ryel (80510) on Friday February 01, 2013 @06:39PM (#42766993)

    Pandora pays at least 2 cents per listener hour. That's the minimum. The maximum is 25% of revenue generated during that playback. So the artist should be getting paid whichever is larger.
    http://www.digitaltrends.com/music/does-the-riaa-even-want-pandoras-golden-eggs/ [digitaltrends.com]

    $1,653 equals 82,650 hours.
    82,650 hours over 1.5M listens means average length of song is 3.3 minutes.

    So, if her average piece is longer than 3.3 minutes, she's getting ripped off.
    Otherwise something fishy is going on. Is BMG taking a big cut?

    It seems to me that 25% of revenue is way more than fair for what is essentially radio play.

  • Re:Demand More (Score:5, Interesting)

    by icebike (68054) on Friday February 01, 2013 @06:40PM (#42767001)

    Is negotiating a higher price not possible?

    It will have to come to that, eventually. A higher percentage of the gross seems reasonable.
    This situation [firstclassalliance.com] is becoming common knowledge.

    The cost to the streamer companies is substantial, in terms of storage, bandwidth, and billing/payment processing. They will not want to give that up willingly, but as numbers like this become common knowledge, they will have to start paying more back.

    The problem I see is that if there is a Label involved the Label is going to get the bulk of the micropayments as well. (They already take the bulk of the money from CD sales, even the big name artists are hard pressed to garner 12% of the revenue from a CD sale).

    It appears to me that from an economics point of view that the price of music has been pushed down to the lowest point until a technology change allows artists to get into the streaming business for the price of a web site. The revenue just isn't there to hold the artist's interest.

    The idea that artists can make a living performing is just not going to happen. Too few venues and too many wanna-be artists and nobody wants to go sit in some smokey bar every time they want to listen to music. Live music is great and all, but when you end up paying $30 for a nobody artist and suffer thru the entire evening for 3 good songs you quickly sour on the whole idea.

  • by cdrguru (88047) on Friday February 01, 2013 @06:45PM (#42767037) Homepage

    Those minstrels got paid - and generally paid pretty good. They got to eat while many of their fellows were starving on the little plot of land they were working for the Earl or whatever. And they wandered from town to town because no town could afford to keep them very long.

    Make no mistake, these folks were living pretty high compared to the rest of society in those times.

    Sure, you can make your own music for yourself. Don't plan on selling it, though, because everyone else can make their own music also. Or, you can listen to other people's music for free - just pay the membership fee for the service and you have your choice. Of course, not even the streaming service is very profitable, much less the artists - there is no money in it anywhere.

    Music for the last hundred years or so has been driven by promotion. You hear about it because people are paying to make sure you hear about it. There are (were?) magazines dedicated to music promotion. AM and FM radio have been driven because of promotion. Free concerts have existed because of promotion - where the artist gets paid but nobody paid any admission. This is all coming to an end and the end of the road is no more promotion - you hear about what you hear about and you don't hear about anything very much.

    Maybe it is a more eglitarian form of entertainment, but it means the end of things like a common cultural reference. A band is never going to escape their locality, which might be geographic or it might be a very narrowly focused group of people, or both. It means that you can never talk to someone that you just met about a band you both have heard of.

  • by godrik (1287354) on Friday February 01, 2013 @06:54PM (#42767129)

    I am not really surprised. It looks like the amount of offer in music grows with time. There is more directors and composers than before. According to [1], there are 2.5 more music director and composer than 3 years ago while the number of musician appears to have decrease by roughly 10% in the same time. Since 99, it went from 52K people to 67K people. So there are 15% more people to pay. Meanwhile the US population only increase 12% [2].
    I do not think the average entertainement of famillies changed a lot but if anything the music budget went down. So I am really not surprised.

    Moreover, I feel like Internet concentrated music interest on a smaller number of artists which performs better than anybody else for no good reason. I mean gangnam style from psy shipped more than 6 millions albums in not even a year [3].

    I do not know the artist that is speaking and I never listen to her music. But she is a cello artist which is not a popular style. So of course making money out of it is difficult. Yet her income increased according to her own numbers [4].

    The real numbers we lack are the numbers from 10 or 15 years ago. How much money did an independent artist make in the 90's ? Is it really worse in 2013? (I ma not saying it is not, I am asking a real question)

    [1] http://money.futureofmusic.org/how-many-musicians-are-there/ [futureofmusic.org]
    [2] http://en.wikipedia.org/wiki/Demographics_of_the_United_States [wikipedia.org]
    [3] http://en.wikipedia.org/wiki/Gangnam_Style [wikipedia.org]
    [4] https://docs.google.com/spreadsheet/ccc?key=0AkasqHkVRM1OdGhjdExSMzYyMXFZUkZNSUJrY3MwNXc&pli=1#gid=0 [google.com]

  • by asmkm22 (1902712) on Friday February 01, 2013 @06:57PM (#42767161)

    I just looked at the spreadsheet in question (found here: https://docs.google.com/spreadsheet/ccc?key=0AkasqHkVRM1OdEJFUnhyNFFkZjVSUWxhWGl1dE9lQXc#gid=4 [google.com]) and found that all told, she made 82k in a six month period. She's hardly living hand to mouth at some dead end job she hates.

    Does her income from streaming services compare at all to what she gets through iTunes? No, but it's just a little extra icing on the cake for basically no work on her part, especially considering her style of music is unlikely to have much of a traditional fanbase (radio, top 40, etc). The nice thing about it all is that, as she gains more media exposure and traction, the basic infrastructure is already in place for her to make more as she gains new fans.

    Again, 82k in six months is hardly a starving musician, especially considering the fringe nature of her music.

  • by cpt kangarooski (3773) on Friday February 01, 2013 @07:00PM (#42767181) Homepage

    I'm all for unions. And for copyright reforms. But not so much for propping up unviable business models and industries. If being a professional musician stops being something that can pay the bills, then so be it. If it's important enough, we'll figure something out. A negative income tax for all persons, maybe. (Because there's nothing about artists that makes them more deserving of welfare than anyone else in similar financial straits)

  • So.... (Score:3, Interesting)

    by boethius (14423) on Friday February 01, 2013 @07:00PM (#42767187)

    We're using an "avant cello" artist to make a point about how dismal fractional royalties are? Should we also be outraged if a "classical banjo" artist or "neo-Accordionist" also aren't making a sustainable living on completely passive revenue streams like Pandora, Spotify, iTunes, etc. etc.?

    While we're at it why doesn't the guy who races dirt-track on the weekends complain that he's not making a sustainable living at what he does. What about painters, sculptors, writers, actors, and other artists... perhaps they should be complaining too that someone isn't providing them with a sustainable living.

    Should they, realistically, be making $50-$80K a year selling streaming music? More importantly is there even a remote shot that an "avant cellist" would have made that kind of money in the pre-Internet days? I'd say the chances are essentially zero that an avant cellist would have a break-out year and make even a sustainable living. There's an occasional break-out classical artist - VERY occasional - but most of them make money from performing not from CD sales.

    The truth is that artists - even the most talented - from time immemorial have had to do something else to make a real living and pay the bills. Perhaps not the best example but I was watching a little thing on luxury RVs - ah, my idle TV watching habits - and they interviewed Bret Michaels. He spends over 200 days a year on the road performing. THAT is how he makes a living - by working his butt off. If this gal expects to make survival income from just creating music and watching the big bucks flow in from Pandora or Spotify she's just dreaming. If she really wants to make a living she'll have to do it by building a reputation performing and, as the article indicates, that is very, very hard to do.

    Honestly $2000 for 6 months of doing absolutely nothing to promote your music - ESPECIALLY "avant cello" - doesn't seem like a bad chunk of change to me.

    A fairer perspective might be huge artists like the Rolling Stones or Rihanna or Katy Perry or Justin Bieber - what kind of money are they making on these services? No doubt it is much much more and are they and their business managers content with the revenue streams from these sources? Probably.

  • Re:Wow (Score:4, Interesting)

    by QRDeNameland (873957) on Friday February 01, 2013 @07:05PM (#42767237)

    I'm surprised that an Avant Cello musician isn't pulling in the coin

    I read the article when it first appeared on the NYT site a few days ago, and even though my taste gravitate to things like 'Avant Cello', my reaction was quite similar.

    I mean, she got 1.5 million plays in six months. Even if she didn't get a dime from it, at what point in the past could anyone playing Avant Anything get that kind of exposure?

    Then I checked out her website [zoekeating.com], to see that she seems to have pretty full touring schedule, and on her Press page there are at least two [zoekeating.com] articles [allthingsstrings.com] acclaiming her success at leveraging online marketing.

    I like your music, lady, but sheesh, cry me a river, will ya?

  • As video equipment explodes in variety and lower cost, and Joe Schmoe gets an idea for a "killer you-tube" video — or a wedding videographer edits last weeks video — I'm constantly struck by the complete lack of options for the DIY cinematographer.

    When you post something on YouTube with a musician's music, you get the take-down; yet, people persist in trying it.

    So, why hasn't the RIAA, who *supposedly* represents the better interests of content providers, come up with a licensing plan that would enable the would-be Spielberg to legally use music in the production of their comedy/sci-fi/drama/whatever video?

    I've talked to a *lot* of people who don't keep up on copyright/patent/trademark issues, and overwhelmingly they say they wouldn't mind paying $25—or more—to license a song for their video. Baby showers, weddings, and other home-made content are ripe for a balance of producer and user, yet the music industry thinks suing people will solve their problems.

    Dammit, we live in an age where setting up a system of home-user licensing commercial music should be easy. Not only that, but the mechanism for indie artists to profit from this system should be relatively easy to set up!

    Why is this not happening?

  • Re:Demand More (Score:5, Interesting)

    by stephanruby (542433) on Friday February 01, 2013 @08:09PM (#42767793)

    Is negotiating a higher price not possible?

    That's not what she's asking for.

    This is what she's asking for:

    "...to incorporate the needs of artists, not just record labels. What are those needs? Linking of avid listeners with artists for concert tickets, merch, music purchases, etc; crowdsourcing tours; providing listener stats and location data, maybe even emails; your idea here, etc, etc. Lift all the little boats. If this quixotic strategy doesn’t work, then I guess I’ll have to change my perception instead.

    I was disappointed in the NYTimes article.like I’m often disappointed in the press. A 30 minute interview full of nuance squashed down to one sentence taken out of context and used to prove some other point. I know, I know, I’m naive. I’ll keep trying."
    http://zoekeating.tumblr.com/ [tumblr.com]

    Here is her revenue breakdown:

    45.55% Music sales
    26.38% Live Performance
    23.90% Sync/Master Licensing
    2.69% ASCAP
    0.89% Soundexchange (i.e. Pandora)
    0.38% Spotify
    0.21% Google Adsense
    http://zoekeating.tumblr.com/ [tumblr.com]

    No wonder she's trying to use streaming to try to maximize her other much more significant revenue sources.

  • by Paul Fernhout (109597) on Friday February 01, 2013 @08:25PM (#42767907) Homepage

    http://www.basicincome.org/bien/aboutbasicincome.html [basicincome.org]
    "A basic income is an income unconditionally granted to all on an individual basis, without means test or work requirement. It is a form of minimum income guarantee that differs from those that now exist in various European countries in three important ways:
            * it is being paid to individuals rather than households;
            * it is paid irrespective of any income from other sources;
            * it is paid without requiring the performance of any work or the willingness to accept a job if offered.
    Liberty and equality, efficiency and community, common ownership of the Earth and equal sharing in the benefits of technical progress, the flexibility of the labour market and the dignity of the poor, the fight against inhumane working conditions, against the desertification of the countryside and against interregional inequalities, the viability of cooperatives and the promotion of adult education, autonomy from bosses, husbands and bureaucrats, have all been invoked in its favour.
    But it is the inability to tackle unemployment with conventional means that has led in the last decade or so to the idea being taken seriously throughout Europe by a growing number of scholars and organizations. Social policy and economic policy can no longer be conceived separately, and basic income is increasingly viewed as the only viable way of reconciling two of their respective central objectives: poverty relief and full employment.
    There is a wide variety of proposals around. They differ according to the amounts involved, the source of funding, the nature and size of the reductions in other transfers, and along many other dimensions. As far as short-term proposals are concerned, however, the current discussion is focusing increasingly on so-called partial basic income schemes which would not be full substitutes for present guaranteed income schemes but would provide a low - and slowly increasing - basis to which other incomes, including the remaining social security benefits and means-tested guaranteed income supplements, could be added.
    Many prominent European social scientists have now come out in favour of basic income - among them two Nobel laureates in economics. In a few countries some major politicians, including from parties in government, are also beginning to stick their necks out in support of it. At the same time, the relevant literature - on the economic, ethical, political and legal aspects - is gradually expanding and those promoting the idea, or just interested in it, in various European countries and across the world have started organizing into an active network. "

    See also:
    http://www.beyondajoblessrecovery.org/2009/11/16/can-unions-and-strikes-still-make-a-difference/index.html [beyondajob...covery.org]
    "What good is it to get more money and more benefits for fewer and fewer remaining workers while they wait for their own jobs to be lost to automation and improved design? Yet, this has been the strategy of most unions for many years. The failure of the US American automakers in Detroit shows how, in the long run, unions creating private welfare states within individual corporations does not work well anymore for union members or anyone else in society these days. The companies become less competitive relative to other companies that pay less and embrace automation and better design, and so they fail, taking all the union jobs with them.
        We are possibly past the point where union actions related to single companies make much sense. If unions are to have any major role in the future, it may likely be as part of larger efforts to rethink the underlying basis of our economy and society, like by somehow being part of a national effort for a basic income, or comprehensive single-payer health care reform, or reforming education, or things like that."

  • Re:Demand More (Score:5, Interesting)

    by hairyfeet (841228) <.bassbeast1968. .at. .gmail.com.> on Friday February 01, 2013 @10:31PM (#42768669) Journal

    Its simply gonna go back to the "old days" of the traveling troubadour, going from town to town and singing for your supper. The problem is the cartels have made damned sure you can give up on any kind of indie collective bargaining, they make sure they are the gatekeepers to the radio, MTV, etc so that you have to sell everything you have worked so hard to create for pennies to get anywhere.

    So this really doesn't surprise me, its either live hand to mouth or sign with a label and risk losing everything, see for example Meatloaf having to file for bankruptcy after "Hollywood accounting" said Bat Out Of Hell I, which still holds the record for longest charting on the billboard top 200 BTW, didn't make a profit, or how Cheap Trick is having to sue their former label for not getting a single cent from any digital sales.

    So its not like the big names get treated much better, the Internet has given all the tools to the musician but the downside of that is with so much competition the actual amount made per song is lower than its ever been and will go nowhere but down. The smart musician will be selling everything from t-shirts to keyrings and will have to do a LOT of traveling to make ends meet, if you are the kind of act that can only exist on recordings? Well things aren't gonna be good for you that's for sure.

  • Musicians ? (Score:3, Interesting)

    by Taco Cowboy (5327) on Friday February 01, 2013 @11:15PM (#42768901) Journal

    Here is how I see it ...

    Music sheet is like a database

    Composers are like the people who key in the data into a database

    Musicians are like people reading from a database and then interpreting the dataset into something else

    And the so-called "Musicians" want to be paid for doing that ??

    How about us, the geeky programmers, the ones who made the database engines?

    We got paid ***ONCE*** for building the databse engines.

    And those Musicians?

    They expect to get paid every-single-time someone else looked or listen to whatever interpretation they did from the dataset they got from the database?

  • Re:Demand More (Score:5, Interesting)

    by meerling (1487879) on Saturday February 02, 2013 @03:24AM (#42769875)
    Beethoven worked in music for about 45 years.
    He wrote 9 symphonies, 5 concertos, 32 sonatas, 16 string quartets, and an Opera.
    Don't forget he did a lot of performances as a conductor, music director, and even bass singer.
    He's even known to have supplemented his income by giving piano and violin lessons.

    Ok, so one of the worlds greatest in the field of music, that had even gained royal patronage for some years, and even he couldn't always make do with just his music income. I know Beethoven didn't have access to audio recording, but they had lots of performances and sold sheet music.
    Now you want to look at the work of 14 albums over 14 years from a rather unknown artist, and complain that there isn't enough money. Did she write all the music herself? I'm guessing her work only comprises the cello due to the name. What is the total duration of those 14 albums? How many tens of thousands of other musicians are there currently looking to get a piece of the action?
    Sounds like she's doing pretty good for the limited amount of work she's doing in the over saturated field of which she's only targeting a niche group within.

    Copyrights and Patents weren't made to let you do something once and sit on your laurels raking it in for the rest of your life. They were intended to give you enough time to make just enough money off of it to encourage you to go out and do more.

    So, how much is she making from her radio play, since they have even lower royalty rates, and why isn't she raising a fuss over those?
  • by Zoe Keating (2832103) on Monday February 04, 2013 @04:16AM (#42783757)

    I expect you've all swarmed off by now, but in case you haven't I will hopefully either clear up some of your misconceptions.

    I am not complaining about my royalties. I put my data out there to show how things work for a moderately successful unlabeled non-mainstream artist. That I am not big was exactly the point. There is little out there in the way of facts as to how regular artists actually make their livings (but lots of opinions on how they should). And as far as streaming goes, most artists are not getting royalties directly, but through a label. Those artists might not be not allowed to talk about royalty splits in their contracts, and in some cases might not even know what they are. I am my own label, and so for better or worse I can talk about these things.

    In doing so, I've attracted a lot of attention from the press and that is how I ended up being interviewed by the NYTimes. The author took a snippet of our conversation and used it to his own ends. I am sure most of you have taken a critical reading class and so you must know that you shouldn't believe at face value everything you read. Most authors have a story they want to tell and they use their subjects to prove that story. If I had been more wise and had a PR handler, I would have demanded a transcript to publish at the same time as the article. Believe me, I'll do that from now on.

    I was not talking about me in that quote. He asked me: Do you think income from streaming will ever replace income from sales? I remember that I said....as the number of listeners grows it will be lucrative for a mega-artist who has millions and millions of listens. I said in Spotify's case it will be even more lucrative for that mega-artist's label because they have an equity stake in the company. I said that I don't think streaming will ever be a money maker for non-mainstream genres like classical or jazz....because there just aren't enough listeners of fringe genres to reach critical mass. So, given that it takes 200 listens on Spotify to make the same money as the sale of 1 song on iTunes, I said we could be condemning these genres to poverty IF streaming is the only way people will listen to music.

    Now here's the other part of that interview that was left out....as awesome as it is, I don't think streaming is the only way people will listen to music. No matter how much of a killer app Spotify is and how Daniel Ek would like it to be how "every single person on the face of this planet" listens to music, I don't think that will happen. But SINCE YOU ASKED dear interviewer, if streaming was the only way we listen to music, then yeah, the fringe could be in trouble. So what fringe artists have to keep doing do is this: make sure fans know they should express their enthusiasm for an artist's music through either direct music sales and/or attending concerts, because streaming isn't enough to live on.

    That's roughly what I said. Now, do feel free to tear THAT apart, because I'm very interested in the discussion and love a good debate.

    Anyhoo, there are two things miain I'd like to change about the current system....and neither of them is about getting more royalties.

    1) When someone buys my music on Bandcamp, I get an email address (and an address if they purchased a physical copy). On iTunes, I get a zip code, from streaming services, I get nothing. I'd like to see music services help artists solve the problem of figuring out where their listeners are...so artists know where to tour. Controversial: who does listener data belong to? The listener, the music service, the copyright holder, some, all or none of the above?Discuss

    2) I'd like to make the basic royalty calculation the same for all parties. It's not clear that is is. Also 18% of Spotify's profits that goes to labels (4% to each of the big 4 and 2% to Merlin). On a balance sheet Spotify doesn't have profits today because they're investing in growth (although I'm sure no one works for free). If you can't reverse the label equity problem, and you re

One possible reason that things aren't going according to plan is that there never was a plan in the first place.

Working...