For a century musicians have mostly found themselves dealing with a distribution system when selling recorded music. Information is hard to come by
Before musicians and their advocates can move to enact a fairer system of pay, we need to know exactly what’s going on. We need information from both labels and streaming services on how they share the wealth generated by music. Taylor Swift, when she forced Apple to back off a plan not to pay royalties during the three-month free trial period for its new streaming service, Apple Music, made some small progress on this count — but we still don’t know how much Apple agreed to pay, or how they will determine the rate.
Putting together a picture of where listeners’ money goes when we pay for a streaming service subscription is notoriously complicated. Here is some of what we do know: About 70 percent of the money a listener pays to Spotify (which, to its credit, has tried to illuminate the opaque payment system) goes to the rights holders, usually the labels, which play the largest role in determining how much artists are paid. (A recently leaked 2011 contract between Sony and Spotify showed that the service had agreed to pay the label more than $40 million in advances over three years. But it doesn’t say what Sony was to do with the money.)
The labels then pay artists a percentage (often 15 percent or so) of their share. This might make sense if streaming music included manufacturing, breakage and other physical costs for the label to recoup, but it does not. When compared with vinyl and CD production, streaming gives the labels incredibly high margins, but the labels act as though nothing has changed.
a tip of the hat to Bjarne