Music Royalties in the Age of Streaming

The music business and music artistry don’t always intersect happily. You might have heard stories about Billy Joel, Bruce Springsteen, Badfinger, and many others who were so thoroughly screwed by the powers that be in the music industry, that you could be forgiven for thinking, “How could in the world could they have been so naïve?” But I take pity on those whose sole aim in life is to create art and who put their faith in others to look out for their best interests. Hell, I have a background in finance and am pretty adept at investing and tax strategy, but that hasn’t stopped me from being completely clueless about the music business.

Which brings me to a conversation I recently had with my friend Phil, who – like me – has uploaded his original compositions onto DistroKid, a platform that enables you to direct your songs to whatever streaming platforms you choose. It’s a good service and it doesn’t cost much. I’ve been using it since 2017, and I’ve uploaded most of my songs onto Apple, Tidal, Spotify, etc., but I never thought to investigate whether all the streams I’ve amassed (and I say this quite facetiously, because there haven’t been many) have led to some income.

When Phil asked me if I’d made any money through Distro Kid, I said, no, that I wasn’t a member of ASCAP or BMI, the performing rights organizations that collect royalties for artists whose songs are played on the radio, TV, or through streaming services. It’s always been my understanding that membership in one of these companies was a requirement to earn royalties. Turns out not.

“You don’t need to be a member,” Phil said. “DistroKid tracks streams and pays you directly.”

Say what?

That’s right. I’d been paying an annual fee to Distro Kids for nine years without noticing the tab on top of the website that says in big bold letters, “BANK.”

Oops.

Phil showed me the tab and how things work, and when I returned home I logged in and discovered that over the past nine years, my compositions have earned…drum roll please…

$79.08!

That’s right. I am officially a professional musician whose compositions are earning cold hard cash! What’s particularly interesting is that DistroKid actually tracks all the streams for you, so you can see which compositions were streamed, when, and through which specific platform. It didn’t take long for me to realize that my biggest-streaming composition is by far – by a multitude of 1000 – the soundtrack I wrote for my daughter’s short film, Preheated, but because it streams primarily on Facebook/Instagram – who pay artists virtually nothing – it’s only made me 47 cents!

Regardless, I’m thankful that there are people out there who have more of a clue about the music business than I do. Thanks to Phil, I can now pay for approximately 3 hours of health care for my wife and me. I sure hope she appreciates all the hard work I put in for our benefit.

It's Time to Ditch Spotify

I know. You signed up for Spotify years and years ago, you’ve grown accustomed to the interface, you have friends and family who use the same service so that you can forward songs and playlists to each other.

I know.

But the bottom line is this: Spotify, Amazon, Apple and some other streaming services are paying musicians far, far less than others, and it seems to me that if you’re a fan of music – particularly newer music – you should want the musicians to benefit. (Let me note that I have no personal stake in this topic; my music has never earned me a cent and that’s not going to change.)

Exactly what streaming services pay is a complex topic and one that I’m not going to unravel in his blog, but according to dozens of websites and streaming calculators that I’ve visited over the past month, YouTube, Spotify and Amazon are at the bottom when comparing average rates per stream. Apple is a bit better. Tidal’s rates are about three times what Spotify pays. Qobuz pays even more.

I don’t want to put my stamp of approval on a particular streaming service over the other, but I encourage everyone to do his or her own homework, to check out rates and try out various streaming services, and then to make a decision that will benefit musicians the most while still giving you the access and convenience you’ve grown accustomed to.

As for me, I dropped Spotify last month and switched to Tidal after a trial period with both Tidal and Qobuz. (Qobuz was great, but their catalog wasn’t quite extensive enough for my tastes – it might be perfect for some listeners.) Switching to Tidal was a painless process. I transferred all of my playlists no problem, the interface is nearly identical, the sound quality is better, and the rates are similar. I’ve made the switch without any regret.

Streaming rates may not matter so much for legacy artists who were paid via the old model. The Eagles and Elton John are doing just fine. But for newer artists who are trying to make a go of it, who’ve put out maybe an EP or two and have enough of a following to tour at small clubs around the country, streaming rates matter. I want young artists who’ve amassed a decent following to make a decent living. No one is guaranteed anything, I know, and not everyone who can compose a song is entitled to the high life, but I’d like moderately successful musicians to at least make enough money to warrant recording their second album and not ditch their artistry for a full-time job at a corporation, you know what I mean?

Let’s say you’re a new artist who’s released an EP and an album and has managed to attract 100 million streams over the past five years. One hundred million streams! Not too shabby! You can probably hit the bigger cities in the U.S. and sell out clubs with a capacity of about 500. Touring is a tough way to make a living. You have to rent a van, hire a manager, pay a sound and merch person, stay in crappy motels or crash at fans’ homes, pay for insurance, pre-pay for merch, etc. It’s not easy (if you want to hear exactly how not easy it is – check out these YouTube videos). The likelihood of you making money on your tour is small. The likelihood of you making good money on your tour is even smaller.

But you’ve got 100 million streams! Surely, that’s going to provide you with a decent income, right?

Well…

On Spotify, these 100 million streams might have earned you somewhere around $400K. Not nothing, for sure, except that these streams were attracted over a five-year period, plus you’ve had to pay off studio expenses and share your income with the record label, your manager, your band, etc.  No one is getting rich under this scenario, which is fine, but I’d like this artist to not be destitute and to have enough money to pay the bills, take a few months off to write new material for another album, rent a decent apartment and maybe even set aside some cash for an IRA.

I think it’s important for music fans to put our money where it aligns with our values. The number one way has been and will always be to buy an artist’s merch and go to their shows. But we can also help by switching to streaming platforms that pay more to musicians. If we do this together, perhaps we can spur a sort of artistic renaissance.