Internet, artistes, recorded music
Billy Bragg has sent out a message to his fellow artists via Facebook saying that the low royalties being paid to artistes for streaming is really the fault of the record labels – not of Spotify. Bragg was responding to the various artists who have recently hit out at Spotify and the streaming service business model such as Nigel Godrich, Thom Yorke and David Byrne – who have said that the royalties paid out by these services are just too small, and if streaming is to ultimately replace both CD sales and iTunes-style downloading, then that’s a problem. But, Bragg notes, all but a handful of indie labels (most notably Ministry Of Sound) remain supportive of Spotify et al, which suggests that, in the main, they are doing very well from the growth in streaming music. CMY Daily reports that the issue for artists receiving tiny royalties is that labels are not sharing enough of the loot with their acts, by applying royalty splits from the CD age, even though record companies do not have the costs or risks that were involved in manufacturing and distributing physical product in the digital domain.
As this blog has previously reported, the digital royalties debate is not limited to streaming; many artists reckon the labels are hanging on to far too much of the money generated by download sales too and in the USA numerous veteran artists are suing for a bigger slice of the digital pie, often In contracts that were pre-digital and silent on the issue. More recent contracts will detail how much of download and streaming money the artists gets and, at least for new artists signed to majors, the majority will likely go to the label. Bragg, wrote on Spotify: “I’ve long felt that artists railing against Spotify is about as helpful to their cause as campaigning against the Sony Walkman would have been in the early 80s. Music fans are increasingly streaming their music and, as artists, we have to adapt ourselves to their behaviour, rather than try to hold the line on a particular mode of listening to music” adding “The problem with the business model for streaming is that most artists still have contracts from the analogue age, when record companies did all the heavy lifting of physical production and distribution, so only paid artists 8-15% royalties on average” explaining “Those rates, carried over to the digital age, explain why artists are getting such paltry sums from Spotify. If the rates were really so bad, the rights holders – the major record companies – would be complaining. The fact that they’re continuing to sign up means they must be making good money”.
It seems some Swedish acts are planning action and Bragg sais “Here in Sweden – where I’m doing a show tonight in Malmö – artists have identified that the problem lies with the major record labels rather than the streaming service and they are taking action to get royalty rates that better reflect the costs involved in digital production and distribution. UK artists would be smart to follow suit”.
CMU Daily 7th November 2013