71.4 F
New York
Friday, June 14, 2024
HomeArchiveIndustry Opinions: Are Streaming Royalties Fair?

Industry Opinions: Are Streaming Royalties Fair?


Related stories

Homeless Hell: The Camp That Could Kill Rock History

Sunset Studio, one of the few remaining recording studios in Hollywood after many closed due to high costs and new technologies, faces a danger worse than a single wild rock star. Sunset Sound’s three studios have produced more than 300 gold records but they could be ruined by a filthy homeless camp next to the building. Garbage is stacked high, needles and pipes are scattered on the ground and homeless people use the street as a toilet.

TikTok vs Universal Music and The Music Businesses Coming of Age

Well, it’s definitely been an interesting few weeks, looking across the ballfield of TikTok vs Universal Music. What is heartening to see is that major labels such as Universal Music seem to have finally learned from previous mistakes made initially in the 1980s. 

Unleashing Chaos: How To Get Free Music- And Why The Music Industry Can’t Stop It

The same platform that brought you cat videos and cringe-worthy influencers is now the go-to place for snagging every song imaginable. Thanks to some clever websites, you can rip the audio from any YouTube video, download it as an MP3 or .wav file, and sail the seas of free music. No subscriptions, no ads, no hassle.

February Round-up: Four music events to attend

Winter holidays have passed quickly, and there are the...

Pitchfork Effect

Last week, media company Condé Nast revealed its plan...

This week we take a look at the ‘hot topic’ of the moment of streaming rates and weather they are fair and equitable. We managed to source a wide variety of the stakeholders involved in the debate including, Spotify, Projekt Records, Kudos Records, PRS for Music (the UK performing rights society) and Merlin. Without further ado comments from our esteemed industry executives regarding the following questions are provided below.

“Are streaming royalty payouts to artists fair and equitable when compared to other royalty pay out rates? Or should streaming royalty payouts be increased?”

Steve Savoca, Head of Content – Spotify (US)

“It’s an apples and oranges comparison. Unit sales are finite purchases, whereas streaming transactions can occur countless times over a much longer period. It is not possible to compare royalty payouts on unit sales v streaming in a fixed period of time.

Furthermore, streaming appeals to a younger demographic who have never legally consumed music and has greater potential to reach a presently un-monetized mass market. We believe in the enormous potential benefit of bringing greater numbers of music consumers back into a legal and monetized environment.

We strongly believe that any debate about streaming royalties being ‘unfair’ is wholly unfounded, and a number of articles have recently attested to this fact. A recent blog by Washington & Lee University’s assistant professor of business David Touve concluded that streaming services actually paid more per stream than iTunes. And Martin Mills, the chairman of Beggars Group, commented about streaming services: “Every play is a pay – and 200 plays will earn you more than a sale.”

Sam Rosenthal, Founder – Projekt Records (US)

“In the world I want to live in, I envision artists fairly compensated when the audience listens to their creations. Spotify and the other streaming sites are not offering rates that respect the artist’s passion, dedication and expression. Their rates are not fair and equitable, thus I removed Projekt’s music from these sites. Music cannot be the chum to line their pockets and fuel their eventual IPOs. I agree that streaming royalties should be increased, but it will require a different model. Free is not a price point that works for creative endeavors. I envision a world where the artists I love receive fair payment for creating ephemeral objects that enrich our lives. I am glad people are having these conversations and asking these questions. Thank you for supporting artists with your digital and physical purchases.”

Charles Caldas, CEO Merlin

“Revenue from our streaming services is showing massive growth, with Spotify obviously leading the way by a very long way. That service in particular is a major revenue stream for our members. We are yet to see any tangible evidence from any member that streaming services cannibalize other forms of consumption. Additionally, we see very little analysis that looks at this issue sensibly. If someone plays a download 50 or 100 times over its life, what is that worth per play, and how does that compare with streaming services, or radio play, or YouTube for that matter? Finally, I suspect the issue of artist royalties on streaming service is much more a matter between artists and their labels than between services and labels.”

Danny Ryan, Founder – Kudos Records (UK)

“First of all, I can only really comment on streaming royalties paid to distributors and labels.  The share an artist eventually earns depends on their individual contract with their label. 

 So, as far as streaming payouts to distributors and labels, my view is that comparing them directly to download royalties is a bit pointless. You need to turn the question on its head.

  • Streaming technology exists, and for the most part it’s being provided by licensed services (in contrast to the early days of downloads).
  • Given a chance to sample the service for free, the consumer seems to like the technology, and judging from conversion rates, £10 per month seems to be the sweet spot.
  • If legal streaming services didn’t exist you would soon see an abundance of unlicensed services filling the void.

As I point out in my blog post, conversion from add supported to premium and bundling will eventually improve per-stream rates, Personally I also view the current share we receive from many of the new digital services as a transitional rate.  Once these services start to scale to a point where they cover their own costs we would expect to see an improvement in revenue share.”

William Booth, Director Of Licensing – PRS For Music

“A lot has been written recently about streaming services and in particular Spotify and the royalty rates they pay songwriters, composers and performers.  From our perspective at PRS for Music, Spotify is one of a number of new digital streaming services at the forefront, along with download services, of providing a legal alternative to piracy online.  Spotify has always done the right thing and worked with rightsholders to ensure their music offering is fully licensed before launch. Our writers and publishers are earning royalties from digital music and this is a growing part of our business; we all need to support these services that are giving users a legal, virus free and high-quality alternative to peer-to-peer sites and generating an additional income stream for creators.   Comparisons with radio or TV broadcasts that may have millions of listeners or viewers are difficult and not always either accurate or appropriate.”


  • Jakomi Mathews

    Jakomi was the original founder of The Music Void in 2007. His first startup was www.akamedia.net. Where back in 2001 we were able to track audio and audio visual broadcasts. We targeted the music industry performing rights societies as customer but ironically it was the radio broadcast who used our service to prove ads were broadcast to their advertising clients - yet the ironically PRO's started using the service from 2015 when they were dragged kicking and screaming into the 2nd decade of the 21st century. He has deep insights into the inner workings of the music business and digital music generally from working with RWD Magazine and then Rock Sound in the UK during the early 2000's. He was then involved in building some of the first artist mobile apps both before and just after the release of the first iPhone. He also worked with Muse's management for a short time and has managed an assortment of artists from Australia and the UK. He now has a new startup called goto.health which is focused on disrupting the healthcare booking sector on a global basis.


- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories



Please enter your comment!
Please enter your name here