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DMN: It Is Time To Completely Rethink How Songwriters Get Paid

Friday, September 16th, 2016

Illustration_music_services_PC_625_418_90Here is a very interesting column from songwriter and musician Ari Herstand at Digital Music News. Much of the information is U.S.-focused, but it’s still a worthy read with a good breakdown of how royalties work in the streaming age.

As the battles rage on in Washington over the recent DOJ ruling for 100% licensing of compositions and theSongwriter Equity Act continues to sit in purgatory in the halls of the do-nothing Congress, it’s time we rethink how to approach songwriter royalties. Because clearly, relying on the laws to properly compensate songwriters is a losing (and timely) battle. By the time they figure it all out, many songwriters will have packed in their guitars for non-starvation careers – like working at Starbucks.

I want to make something very clear from the get go. I am not a tech basher. I am not a doom and gloom musician-blogger. It is the greatest time to be an independent musician in the history of the music business.

But this isn’t about indie musicians. This is about songwriters.

Many of my fellow DIYers are now confused. Because so many of us are both – musician/songwriters. But there are hundreds of incredibly talented songwriters who are not Artists with a capital A. In that, they aren’t touring, gigging out much, releasing music under their own name or band name, but rather, are writing songs every day with the hopes of getting them cut by Artists with a capital A.

Now, let’s look at the problems which we’ve all heard about. Even people completely outside the music industry have read Kevin Kadish’s “My Song Was Played 178 Million Times and I Was Paid $5,769” piece or Aloe Blacc’s “Streaming Services Need To Pay Songwriters Fairly” where he stated “In return for co-writing a major hit song, I’ve earned less than $4,000 domestically from the largest digital music service.” But unfortunately these stories got completely convoluted and lost in translation where publications (including Digital Music News) mistakenly reported that Kadish’s plays occurred on Spotify. (They were actually on Pandora – a radio service which calculates plays completely differently). But everyone just reads the headlines. This headline initially said “178 Million Times On Spotify.” Spotify has been the default “bad guy” whenever the royalty debate occurs.

But, as recently revealed by Mark Mulligan, Spotify is actually paying out about 82% of their revenue, in part, because of massive guaranteed payments (estimated at $1.6 million A DAY) paid directly to labels for the rights to use their catalogs on the service. Talk about a shakedown.

And with Spotify paying out so much of their total revenue, they clearly are not the problem. But they have taken most of the flack and have gotten such a bad name over the years that many are still boycotting the service on principle. Last night while I was in a writing session, my co-writer/producer (not an Artist) pulled up a YouTube video to search for a Bee Gees song to reference. I said “still haven’t jumped on the Spotify train yet huh,” to which he replied “I can’t support Spotify. They don’t pay.”

But YouTube pays WAY less. Publicly, they state that they pay out 55% of their ad revenue to “rights holders,” but really most of that goes directly to the major labels as well.

But as one indie label revealed from their royalty statements, YouTube is only paying about $.000012 (yes four fucking zeros) per stream, whereas Spotify (on their same royalty report) paid an average of $.0037 (combined paid and free users) per stream. But, again, to reiterate these were payments to the label. Songwriter royalties are paid to publishers from streaming services and they are MUCH less.

So, tell me again why you’re mad at Spotify and not YouTube?

To keep reading, CLICK HERE.

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