OPINION: The Issues With Streaming
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WRITTEN BY: Will Kirkpatrick
Streaming takes up a large percentage of media consumption today. With services like Netflix, Hulu, Spotify, and Google Stadia, there is a cornucopia of content at your fingertips. Specifically looking at music streaming, we have seen a massive increase in the past decade. From 2015 to quarter 1 of 2021, streaming subscribers jumped from 78.6 million to 487 million[1]. In terms of market share in the same time period, streaming went from 35.8% (almost tied with downloads at 33.1%) to 83.8%[2]. The chart[3] below shows these trends in more detail.
While this chart shows a positive trend for the music industry, when you look at what artists are being paid you see the tragedy unfold. The 4 largest streaming services[4] (in terms of number of subscribers and excluding TenCent which is only available in China and uses a unique pay structure) are Spotify, Apple Music, Amazon, and Google. These 4 companies hold 69% of the market share and have a payout per stream that averages to $0.0055775 per stream, slightly over a half a cent. While this number is less relevant to a large artist like Drake, who racked up >8.6 billion streams in 2021[5], the smaller artists are affected the most.
To put it in perspective, the poverty line is set at $12,880 for a one-person household in the contiguous United States[6]. You would need to have 2,309,279 streams in a year to be considered equal with the poverty line. This is assuming you are the only person in your band and have spent no money on making and distributing your music. Even then you are living off ~$1,000 a month, doable but not ideal.
Talking with local artists, the consensus is that companies need to pay them more.
“The ‘best’ solution would be for these platforms to start treating artists as employees and not users. After all, it’s us who are doing all the leg work,” said Andrew Montoya, vocalist and guitarist in Graffiti Smile.
“The more practical solution is to support live music and merch. I’m a particularly big supporter of vinyl because pirating it is super difficult,” said Montoya.
The lack of money is a big hurdle for small artists, it is very hard to pursue music full time without taking a big financial hit.
“Only allowing artists to make fractions of a penny per stream keeps us from pursuing the band full time. Pretty much every penny we make goes back into the project at the end of the day,” — Philadelphia band, Beach Fuzz.
Even the listeners who are not affected by the low payouts are concerned.
“It would be cool if there was a platform which all the funds go to the artist. There is Bandcamp, but it’s not as widely used” — Kayla Paul-Koch, Junior Communication Studies Major.
Back to some math, CDs range from $12-$15[7]. Going with the low end, it would take 2,153 streams to equal buying one CD.
“Lessening the number of streams it takes for that number [Streams = CD sale] to equal out… say 100 streams to equal to one CD sale, maybe lower that to 10 streams or 5 streams,” said Abi, freshman English and Women and Sexuality Studies dual major.
The clear consensus between artists and consumers is, ‘just pay them more,’ which seems like an obvious answer. But how do we reach that?
Look at the numbers. In Q1 of 2021, Spotify had $41 million in free cash flow[8]. That is a large chunk of money they have left over. While they could and should raise the wages of their lower-tiered workers, they still have the ability to pay artists more.
That is just one example of one company; Apple profited $20.6 billion in Q4 of 2021[9]. This is not just the Apple Music sector, but they are still generating a lot of money that could go to the artists that keep their platform alive.
There does not seem to be an effort from any of the big companies to increase their payout rates. With these companies having such a chokehold on the music consumers, it seems unlikely the corporations will enact change on their own.
This debate has reemerged in the past month because of the situation with Joe Rogan, Neil Young, and Joni Mitchell. This article from Business Insider goes into more detail how the payouts and Joe Rogan situation go hand in hand. Pitchfork, as well, published an article on how this was the best chance to boycott Spotify to demand change.
But what can you as a listener do right now to support your favorite artists? The best way is to buy physical media, attend concerts, buy merch, and maybe look into supporting them on sites like Bandcamp. On the first Friday of every month, Bandcamp waives their revenue share so artists get more money. Along with this, many artists allow a “pay what you want” model; so, you can spend the regular price or give them as much as you want.
Be a smart music consumer and do your part in supporting small artists. Check out WHIP’s website every Wednesday where we post a list of every show for the coming weekend. Most of these events are less than $10 and you are directly supporting small artists and fellow college students.
@William_Kirk_ on twitter
*the opinions expressed are my own*
[1] https://www.statista.com/statistics/669113/number-music-streaming-subscribers/
[3] https://www.statista.com/chart/17244/us-music-revenue-by-format/
[4] https://www.statista.com/statistics/653926/music-streaming-service-subscriber-share/
[7] https://www.gearpatrol.com/tech/audio/a731474/reasons-to-buy-cds/
[8] https://s22.q4cdn.com/540910603/files/doc_financials/2021/q1/Shareholder-Letter-Q1-2021_FINAL.pdf
[9] https://www.apple.com/newsroom/2021/10/apple-reports-fourth-quarter-results/
