In this article Damien Kearns and Steve DeMott consider the parallels between the effect streaming has on the post-production and the music industries and the difference in response between those two industries.

When thousands of screenwriters and actors hit the picket lines in the US, in part to take on streaming services to ensure fair deals for their members, some began to wonder why musicians don’t take on streaming services as well? Can musicians wage war with streamers?

Current Events

When the amalgamated union of SAG-AFTRA ( Screen Actors Guild – American Federation of Television and Radio Artists) joined the WGA (Writer’s Guild of America) on US picket lines, midnight July 12, 2023, some of their many grievances were clearly aimed at streaming services like Netflix and Disney+. Among the contentious issues facing content providers for large online video distributors is the push for fairer compensation for the many times and many ways creative projects are accessed online by paid subscription sharing platforms. 

If it sounds like a familiar fight, it’s likely because we all know at least one musician/composer/songwriter who has encountered an analogous situation, regarding music streamers like Spotify, Apple Music, Tidal, Amazon Music, YouTube Music, Deezer, and others. We’ve read about big name stars boycotting streamers and general discontent among rank and file music makers receiving micro payments whilst vying to reach macro audiences.

So the question is, can music makers band together to engage in a similar job action being taken in the United States by screenwriters and actors to address perceived compensation inequities from streaming services? The answer is, yes. The question is how? 

Does compensation matter to creators across all musical genres and strata? You bet it does. To quote Snoop Dog on this issue, “Where the f*ck is the money?”

Some Numbers

In the US, music streaming accounted for a whopping 84% of all recorded music revenues in 2022, the last full calendar year measured. Physical media sales formed 11% of the pie, whilst digital downloads were at 3% and synchronization royalties (from synching music to other media like films, TV, corporate videos etc.)  at a miniscule 2%. These numbers are available at the RIAA’s (Recording Industry Association of America) website here. The RIAA is a collection of record labels and distributors that control roughly 85% of all “legally sold” recorded music in the US so their site is the most compelling place to seek any sort of meaningful data on this subject.

In terms of a ‘pie’, streaming would represent such a large portion of recorded music’s income that the remaining ‘scraps’ would barely feed a mouse, if we hold to the ‘pie’ metaphor. 

Even though I personally buy CD’s and vinyl records as my primary (only) music consumption method, I can see my style of music consumption is the 11% minority share and at the moment at least, is not a popular enough source of compensation to feed many starving musical artists out there. In fact, many of the established legacy acts of yesteryear who have re-formed and hit the road on tour over the past number of years have cited the combination of poor physical media sales and inadequate streaming income as the motivation for the geriatric rockslide recently deluging our performance venues. 

Another of the irksome aspects of the streaming business model is ‘executive compensation’. When we hear that someone like Dawn Ostroff, Spotify’s former chief content and advertising business officer, had a million dollar base salary and was compensated around $7.5 million in 2022, it’s hard to imagine someone looking at a $4 check for streaming residuals with anything other than disbelief and anger. 

Judging by the per-stream compensation paid by various companies in 2022, in some cases, it takes hundreds of streams just to make $1.00. Check out these numbers, aggregated by producerhive.com or take a look at the picture below.

In a nutshell, Tidal Music and Apple Music pay somewhere around a penny a play (Does anyone else remember when a penny used to buy something?). Everything below Apple Music on this list pays half or less than half what Apple does. 

I don’t know about you but the bottom two of these companies quantifying someone’s creative output at about a tenth of a penny per play seems like a real slap in the face to all the people who make songs happen and underscores a certain palpable contempt for recording artists in general. Some of the other numbers aren’t much better.

The question is: Can musicians band together and push these numbers up? For this article, I asked Jeff Waye, at Third Side Music, to weigh in on this question. Third Side is a global music publisher and as such, deals directly with labels and other publishers over rights issues pertaining to performers and their music. Jeff, as well as being VP, COO and Co-Founder at Third Side Music, has hinged his whole career on his love of live music and recorded media. As someone who deals with this topic daily, I wanted to know if he thought music content creators could take on streamers in the same manner as their TV and film counterparts.

Here’s what he said:

Jeff Waye: 

I'd guess that approx. 85% of music on streaming sites is via a label (15% comprises direct deals and via label services/artist owned label type deals). It's the labels (and to lesser degree publishers) that have those rights and control the deals/narrative. So artists collectively can't really rise up against streamers. They'd need to collectively pressure labels and publishers first and that alone is a serious undertaking to get enough people to agree, let alone the next hurdle.

Even someone like Neil Young barely moved a needle [in 2022 Young joined a list of artists boycotting Spotify]. You'd need everyone on board and particularly at the top end,,, but....

Nothing would matter –needles wouldn't be moved- without majors/biggest players on board. And the thing with major companies/major players is they often tend to play both sides. They'll complain about rates from one side of the mouth while taking share stock and unallocated (not passed through) advances from the other side. For most labels/publishers it's a cash cow and not a boat to be rocked. If you have 50-80% revenue share on 100000+ tracks you're doing fine. It’s a game of land grabs and they’re not going to pull their real estate off the market. When it trickles to your band with 75 tracks it can often amount to very little real money. 

As for job action, the path to "striking" [aka collective job action] isn't really in place. It starts with their record/publishing contracts and then with the DSP’s [digital streaming providers]. So step one is find the right label/publisher and/or don’t settle for terrible rates (there’s plenty of competition and flexibility in contracts these days). And ideally one that is part of trade bodies constantly pushing DSP’s for better rates (NMPA in particular has racked up a long list of wins on behalf of us and artists we rep). Or go in alone if you have the resources and control your margins. Important to realize that DSP’s are tech companies at the end of the day, They’re not selling music really. They’re selling subscriptions (and ads) and it’s a finite pie to split from so don’t expect them at a top level to spend a lot of time caring about “art”. From my view the path to making a livable baseline wage in music is understanding and being active on all monetizable fronts. It’s a big circle with every part of it feeding into/lifting the other. Digital revenue can be significant, but a lot of what drives it needs to be built outside the DSP eco-system. 

The fact is, the recording industry might have to contend with various adjunctive tech-based and live performance musicians’ unions but when it comes to signed artists, contracts trump collective agreements and record contracts are still the ‘holy grail’ for most artists who aren’t successfully producing and distributing their own material. As Jeff said,there’s likely no scenario in which an entire label’s roster of acts would be willing to walk out to take a stand against poor returns from streamers. Or is there?

So What Can Be Done? 

Let’s set aside Twitch’s woes in 2020, Spectrum’s issues in 2019 and 2022, Spotify’s 2018 settlement with Wixen, Spotify’s issues with one of my favorite rap acts, Black Sheep, earlier this year, and the rest of the endless legal litany of other current and past courthouse entanglements that would otherwise obscure the topic of this conversation and we’ll head on into strategizing ways to ‘game’ the system and confront or bypass streamers.

Also, there are companies that purport to promote your songs to boost your stream counts but considering the prohibitively high percentages they charge, let’s leave them out of this conversation because they are, in fact, parasites and rather than seeking to solve any problems, they are looking to charge artists money they don’t have. 

So to begin, anyone trying to sell music to the public needs to educate themself prior to committing to any sort of contract. We saw earlier in this article that not all streamers are compensating equally. This should be the critical part of any contract talks since as I mentioned, 84% of the industry’s income comes from streaming services. 

One viable way to effectively combat the dearth of streaming royalties is to develop other income streams, necessarily sanctioned inside any deals/contracts an act might have or not. 

For instance, promote the sales of physical media and digital downloads at shows and online to grow this facet of income. This is done well by many acts already. I feel some acts do this far better than others by adding value-added autographs to their merchandise and offering up exclusive content that’s not available online in any meaningful way.

As an example, I went to see Black Sabbath in August 2016, knowing there was an exclusive, signed CD available at the show that would not make its way online. The disc is composed of four previously unreleased studio songs and four unreleased live songs. Not only do the autographs push up the price of the physical media, the physical media earns the acts a larger percentage, typically, than streamed plays do (usually between 10-20% of the wholesale price of the media). The other thing to mention here is this exclusive content enticed me to see the band another time on a tour I had already attended, since the CD wasn’t available at the prior show.

Taking this concept further, consider embedding physical media sales or digital downloads into ticket prices to realize income.Ticket sales are still a big earner and packaging in physical media and/or digital downloads to the ticket price is a value add that bypasses streamers and offers a better percentage for the performers and songwriters involved in an album’s creation.

Not so long ago, certain bands were actually sending out copies of their CD’s for each ticket purchased. I’ve an AC/DC (Black Ice) CD and a Duran Duran (Paper Gods) CD in my collection just because I bought a ticket to each of these shows that came to town. Even if the bulk of all music listeners are into streaming, the discs and digital downloads are still going to get plays and expose listeners to a band’s offerings, pushing up those streaming numbers. 

I’d personally advocate for digital downloads over and above CD’s as an embedded bonus for ticket purchases since the cost for this scheme is relatively low compared to physical media, gives the purchaser a chance to familiarize themselves with the latest release by the act in question, and can be a great earner if a lot of tickets are sold.  

Though physical media and digital download are tiny slices of that recording industry income ‘pie’, they can also lure people to stream a band’s content online and drive up those streaming residuals. 

Beyond all this, no one said music creators can’t organize collectively. Social media has been weaponized by large groups of people for many different causes where traditional paths of resistance are nonexistent. Join or create social media pages and groups aimed at tackling streaming residuals and enlist big name players to spread the word. People will begin to notice. 

An Alternate Reality

What would an ideal streaming compensation model look like? Perhaps one of the most interesting models for artist payment out there comes not from film, tv or music streaming but from online e-book distributor, Rakuten kobo, aka Kobo. In this posting, the company states:

Each month, we take the total revenue (we'll call that Monthly Revenue) earned from Kobo Plus subscriptions. We also take the total minutes that all subscribers spent reading that month. (Minutes Read). We divide the Monthly Revenue by the Minutes Read, which allows us to assign a monetary value to each minute of reading (let's call it Value per Minute Consumed). This value will fluctuate month to month based on subscriber number and total reading time. 

Let's look at an example. Imagine we have 100 subscribers paying 9.99 a month each. Our total revenue for that month is 999. Let's imagine that those subscribers spent an average of 2 hours a day each reading. 2 hours a day for 30 days is 3600 (120 * 30 = 3600). So 100 readers spent a collective total of 360,000 minutes reading on Kobo Plus that month.

In order to pay our authors, we calculate the value of one minute of reading time. 999 divided by 360,000 =0.0027 (Monthly Revenue/Minutes Read = Value per Minute Consumed). The payment rate for authors on KWL is 60%. This means that for every minute a reader spends reading your book in this example, you earn 60% of 0.0027. A book that takes a reader 3 hours to read would therefore generate 0.2916 (180*0.0027) * 0.6) in earnings. 

In our sales reports, we report minutes read in measures of 300 minutes. In the example above, this would come out to 0.81 cents per 300 minutes of reading time. These blocks of 300 minutes are how these will be reported in your monthly subscription sales report.

So, rather than a straight up per-unit price, this company has decided to tie its monthly revenue and time spent consuming products together to remunerate authors. If music streamers were to do something like this, I suspect the model would be a lot fairer since a penny per play means right now, Yes’s 18:45 song “Close To The Edge” and The Beatles’ 1:46 “I’ll Cry Instead” if the same metric is applied, would generate the same amount of compensation for the creators even though one listen of each tune would generate wildly different site traffic numbers. Since longer songs have more potential to be skipped through or skipped over, the compensation model for minutes played is more egalitarian than the current per-play model.

Kobo also offers a purchasing model in which the author receives 70% of the royalties, which as I’ve been told by veteran former Harper-Collins Canada Senior Director of Publicity, Communications and Speakers’ Bureau and current speaker agent/author representative, Rob Firing, are “much higher than a regular publishing deal”. Also in their model, individuals can post their own materials or their publishers or agents can. 

In the end, musical content creators need to learn from their streaming experiences. If your act isn’t getting the big, big numbers of streams, it’s a hard reality. Let’s face it, the vast majority of music being streamed must necessarily be little more than white noise to most of the streaming public, considering Spotify alone has over 100 million tracks to choose from. If a track’s stream count is to go up (provided it’s any good to begin with), word of mouth, website and social media presence, press coverage, digital downloads, concerts and even physical media located in music stores all have to be part of a multi-pronged approach to promotion. 

Join The Chorus

Just because musicians and composers aren’t necessarily in any sort of collective bargaining unit doesn’t mean they can’t all say the same thing at once. It’s important to mention ‘soft’ streaming income and single out the worst paying offenders when negotiating with anyone who offers to buy songs or sign an act. These things should stay in business conversations, in press interviews, and in online chats; the only people who can perpetuate these conversations are the acts themselves. As I said before, joining or creating social media pages and groups to raise awareness of this issue should be a fundamental forum. 

Taylor Swift might not have made much headway when she pulled her songs from Spotify in 2014 because of concerns about poor compensation but she did manage to boost the conversation around streaming and its downsides. What we are seeing in the film and TV industries with the SAG-AFTRA job action right now is that onscreen performers at the top of their respective creative professions carry a lot of weight in their opinions. There are a lot of very famous people sounding off right now about streaming services and compensation and this, I think, is great news for the whole entertainment community.

The more people, famous or otherwise, say the same thing, the more the dialogue becomes unavoidable for people who as of right now, have managed to mostly sidestep any actions that might fix the current broken remuneration model. End of the day, when looking at the producerhive.com chart on streaming royalty rates per stream, there’s no realistic argument for one streamer paying almost 1/10th of what another does per play. One reason this can happen is that people allow the floor to drop out of the pay model by signing on to sites that prey on content creators. 

Come Together

To close this article, I’d like to point out that guilds and unions work inside TV and film production because it’s a wholly different creative process than making music and being under contract to a label and publisher. On set, in offices, in post production suites and mix stages, there are so many people working towards common goals that collective bargaining can persist because the masses are being paid and managed by the few. 

Before I became sole proprietor 10 years ago, for 15.5 years of my career, I was a card carrying member of the ‘Communications, Energy and Paperworkers Union of Canada’ and later the Canadian Media Guild, when the CEP’s workforce at the Canadian Broadcasting Corporation was absorbed into the CMG. 

There was a strike inside the first few years I worked there (which I actually spent in bed with pneumonia due to overwork, ironically), then two lockouts during which I was a Picket Captain at the Welling Street entrance to the Toronto Production Centre. I’ve walked the line many times, for weeks and months, respectively. As a Picket Captain, I took care of people out there, while I was sandwiched between workers, management and a private security firm who were hired mostly to intimidate those of us on the line. 

Did we get exactly what we wanted any of those times? Not entirely! but maybe one win was more of a win than the other couple of times. What we did go back to after our job actions was reasonable monetary compensation, safe work environments, medical and dental benefits, and a pension scheme. All this for the low price of about 2% of our regular income going to union dues. 

Individually, we lost our wages every time we went out and I’m here to tell you, strike pay is paltry. We paid union dues on every paycheck whether we wanted to or not and regardless of our positions inside the building, when we were out, we were all exactly the same: placard-wearing, out-of-work people with loads of personal and financial worries, facing an uncertain future. 

As Picket Captain, I had to hold management and their underlings for 2 minutes before they could enter the building, split up altercations, chase people down who were trying to get out of walking the line, engage with the security forces to prevent issues from deteriorating, confront any situation that might jeopardize our right to protest outside our workplace and make decisions like whether I should just sign a sick person in and out so they could get their strike pay without having to make themselves sicker. In short, there are a lot of aspects to unionized, collective actions that are pure drudgery and not at all fun. 

Then again, I met my wife while I was on the line and a number of other people I know met their partners because it can be very, very social in large groups of people who have nothing but time on their hands. We were also bolstered by members of other unions who joined us en masse on occasions, celebrity music performances, road trips to picket other locals where membership was small, and the common sense of purpose and unanimous hope for a positive outcome from our struggles.

Musicians and songwriters mightn’t be able to band together on the same scale as thousands of unionized broadcast employees or screenwriters or actors, but it’s my belief that when people share a common goal, they will find a way to come together to make it happen.