Streaming services have undoubtedly brought the artists that create such music to more people than ever. Streaming has also made it possible for obscure bands or less-well-known artists to make it in the business. The downside, though, is that streaming isn’t lucrative even for famous musicians. Here’s what is going on with streaming and why it isn’t yet a moneymaker for many musicians.
Almost every 21st-century music lover has probably now streamed music, such as from industry giant Spotify. Because of streaming, famous musicians and bands may easily see ten, or 20, or even 50 million or more streams of one of their songs sent to requesting listeners. But what does streaming pay a musician?
Using Spotify as an example, streaming typically pays musicians from $0.003 to $0.005 per stream, meaning you’ll need about 250 streams to make a dollar. Suppose 15 million listeners each streamed your band’s song once this year. You’ll likely earn around $60,000.
Admittedly, $60,000 is nothing to sneeze at, but if there are five of you in your band, that might amount to $12,000 per member, and that’s before agents’ fees, taxes, or any other expenses. How many musicians or groups are likely to see 15 million streams of one of their songs? Statistically, only a relatively small number will.
Musicians and songwriters also report that they’re lucky to make a few hundred dollars in royalties yearly, even from number one hits. In the United Kingdom, a prominent musician’s union reports that in 2020 about 80 percent of artists made only about $280 yearly from streaming or the US equivalent of $0.013 per stream.
Is streaming worth it?
The exposure streaming gives to musicians trying to make it big might make some sense for music creators just starting, but how about famous acts and musicians? Given what streaming services like Spotify pay per stream, most musicians may not even be able to make just steady money from streaming, let alone get rich from it.
Artists and revenues
It’s always been the music industry’s case that record labels make more money from a song than the artists who created and produced it. According to some industry sources, as streaming has become the main way listeners consume music, even less money is finding its way to musicians. Consider the following factors as to why:
- Streaming isn’t like radio, where musicians receive easily trackable royalties each time one of their songs plays.
- Unlike in radio, streaming requires listeners to actively select the music they want to hear rather than passively sit there while music comes to them.
- Streaming music is also often composed of playlists. A typical playlist could contain many songs from various artists. How are streaming royalties fairly divided if artists don’t even know if playlists with their songs on them exist?
- In the end, musicians must rely on the streaming music services and record labels to deal fairly with them.
- Suppose that most record labels treat musicians fairly. The money paid per stream is so small it takes enormous economies of scale to make even a famous musician the kind of money they can make from record sales and terrestrial radio play.
Developing a solution
There’s no way to put the streaming genie back in the bottle, but musicians also want to be fairly compensated for their work. One way of ensuring musicians benefit when their music streams could be to redo currently outdated copyright laws to reflect how streaming works.
Finally, “equitable remuneration” for streaming musicians could be done via a third-party collecting agency, as already happens when their music plays on the radio. For example, the collecting agency could take a royalty from the musician’s record label and pay it straight to the musician rather than the musician relying on a streaming service to pay them.