Streaming Services Don’t Pay Much for Music

Consider Pandora and Spotify, the streaming music services that are becoming ever more integrated into our daily listening habits. My BMI royalty check arrived recently, reporting songwriting earnings from the first quarter of 2012, and I was glad to see that our music is being listened to via these services. Galaxie 500’s “Tugboat”, for example, was played 7,800 times on Pandora that quarter, for which its three songwriters were paid a collective total of 21 cents, or seven cents each. Spotify pays better: For the 5,960 times “Tugboat” was played there, Galaxie 500’s songwriters went collectively into triple digits: $1.05 (35 cents each).

To put this into perspective: Since we own our own recordings, by my calculation it would take songwriting royalties for roughly 312,000 plays on Pandora to earn us the profit of one– one– LP sale. (On Spotify, one LP is equivalent to 47,680 plays.)

Damon Krukowski, a musician for the bands Galaxie 500 and Damon & Naomi wrote up a nice piece for Pitchfork about how music streaming services like Pandora and Spotify aren’t very good business models for musicians who license their music to these services because they don’t pay well—even if their songs are played millions of times. Krukowski does say the services are great products for music listeners (he pays $9.99 a month for Spotify).

In response to a post criticizing Krukowski’s piece telling him that he simply needs to go on tour to make money, Maura Johnston wrote up this great post explaining why touring is not the million dollar answer for musicians trying to make a living. The best ways to support your favorite artist is to obviously buy their music and merchandise directly from them and see them live when they’re in town, but unless you’re a band like Nickelback, there still isn’t a magic model to make even moderately successful bands a lot of money.


7 Comments / Post A Comment

amirite (#2,677)

I use iTunes to buy most of my music. Am I the worst?

Mike Dang (#2)

@amirite You’re not the worst! The worst would be downloading the music illegally, of course.

Rooster A (#1,620)

@amirite As an independent musician with an album for sale and available for streaming on all of these sites, my preference is that you buy directly from the artist whenever possible – especially if they are not produced by a major label. iTunes is the next best as far as paying us, Amazon pays a bit less than iTunes, and these streaming things are a total racket.

It’s nice to see that someone looked hard enough to find a track from my obscure classical album on Spotify, but it would have been much nicer if they had shelled out the $0.99 to buy it.

ranran (#1,002)

I think Damon Krukowski’s post is fantastic, and the response on Detroit Gorilla — “Boo fucking Hoo” and whatnot — is vile. But I do think there is a point to be made that there is a new financial model in music, and touring is an integral part of that. Yes, to suggest that touring will solve all of a musician’s problems is absurd and comes from a point of privilege — although to be a musician requires a certain amount of privilege, unfortunately. But touring, merchandise, and licensing are the ways that bands make money now, and while some of Johnston’s points are completely valid, others are not. (I could offer “Just don’t play in Nova Scotia” as a solution to several of her points, ESPECIALLY #4, which strikes me as an absurd argument against touring and a fair, though obvious, one in favor of sensible tour planning.)

Buying music directly from an artist is fantastic, and certainly preferable to streaming or any other form of acquiring music. Please, do this. But streaming is no worse for an artist, financially, than listening to the radio, taping a friend’s record, downloading music illegally, buying a used record (which I never hear anyone complain about for some reason), etc., and probably comparable to buying an album on a major label.

I will repeat two things I have said on here before:

1. I have interviewed so many musicians, from very successful to barely holding on, and they’ve all said the same thing: they do not care if someone downloads their music illegally. A direct quote that pretty much sums up their attitudes: “I don’t give a fuck. I could never care.”

2. The best explanation of how royalties work for a band on a major label is still Tim Quirk of Too Much Joy’s incredible, hilarious post from 2009: Basically, if the band you’re talking about is or was putting out records on a major, they’re probably not going to see any of your money no matter how you get their music.

I just want to note that I spend far more money on music than most people do, and this is not me trying to justify some bad behavior of mine in any way. But I have zero problem augmenting that with streaming and, yes, illegal downloading, which often leads to purchasing an album.

jfruh (#161)

@ranran streaming is no worse for an artist, financially, than listening to the radio,

Is this actually true? I’m not sure that it is. The pay structure is different, in that I believe that Internet streaming pays explicitly to artsts whereas radio stations pay to songwriters. So if you’re in a boy band and haven’t written any of your tracks, you get nothing from radio play (except for worldwide fame). But the guys from Galaxie 500 would.

ranran (#1,002)

@jfruh OK, that’s definitely a valid distinction. That’s not actually what I was intending to say — I think you’re talking about a comparison between someone streaming a song and a dj playing it over the air, in that both of these people are choosing to play a particular song. I was talking more about people turning on the radio, happening on a song they like, and listening to it, because I’m trying to make a comparison based on options that the average person has for listening to music. In the sense that I’m referring to, the radio listener makes no impact on how much the songwriter is receiving in royalties.*

You are definitely correct that songwriters receive royalties from radio airplay, and though my radio days are juuuust far enough behind me for me to remember how much, I don’t doubt that it’s a higher rate than streaming. However, radio royalty rates are still relatively low, and typically don’t make a huge difference for the artist. Additionally, these are paid not directly to the songwriters, but to ASCAP and BMI, who then take their share and pass it on — so if you’re not part of either of those organizations, you have no means of getting these public performance royalties.

*OK, technically part of the formula used to calculate public performance royalties involves the radio stations number of listeners, but one person listening is not going to make a difference — both in that it’s not going to significantly change the listener base size and that they have no way of actually measuring what station you’re listening to.

readyornot (#816)

On whether or not touring makes money, and whether or not moderately successful bands can be music-career-only professionals: Mike Doughty had a great open letter in response to the New York magazine profile of Grizzly Gear (referenced here with a link to Mike’s post on it). It’s .

He says, “It breaks my heart to read that they’re struggling financially. For a band that can sell 5,000 tickets in New York, I’m sorry to say, that means that, as a business, they’re spending too much. Though my New York play is Le Poisson Rouge, City Winery, or Bowery Ballroom, in overall yearly income, I net a lot more of the gross.”
There are important lessons for fans of music on how they can best support bands, but that is not to say there aren’t choices that the musicians themselves can make to improve their livelihoods. There’s also a choice to whether feature your music on a streaming service at all. @Mike, didn’t you buy Taylor Swift’s new album on iTunes when it was not yet available on Spotify?

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