Music streaming services fail to properly compensate artists

Over the last several years, streaming services such as Spotify and Apple Music have normalized the notion that music should be easily accessible and affordable. These services provide undeniable benefits for listeners, allowing them to create and share custom playlists with each other and easily discover new artists, but at what cost to those artists? Compensation. Streaming poses a serious threat to the livelihoods of the vast majority of musicians and songwriters, as unethical and discriminatory payout models disproportionately reward only the absolute top-tier artists, leaving the rest in search of alternative sources of revenue as they’re compensated with mere fractions of pennies. 

Selling merch and physical formats of one’s music, such as CDs, cassettes or vinyl LPs rarely yields a profit that offsets the production costs, and touring is no longer financially or logistically viable for most, especially in a post-pandemic era. This makes it almost impossible to ever make a living in music. Streaming is one of the last sources of revenue available to artists, but sadly, it’s also the least lucrative. 

Of all the streaming services available, Spotify receives the most criticism for this compensation controversy. It’s the most popular streaming service in the world, boasting 456 million users, and 195 million subscribers, according to its website. But while the New York Times reports that a 99-cent iTunes download used to yield artists about 7 to 10 cents after deductions for the retailer, record company and songwriter, services like Spotify are stooping far lower. A Business Insider report from 2020 found that artists earned an average of about $0.0033 per stream, though this is not a guaranteed amount. According to Vice, “Spotify also pays out royalties on the industry standard ‘pro-rata’ basis,” meaning that it determines an artist’s payout based on how their individual stream count compares to those of all other Spotify artists. And instead of paying the artists directly, Spotify pays the rights holders, who then pay the artists, per USA Today. This has resulted in a skewed system, where, as reported by Rolling Stone, “the top 10% of artists receive 99.4% of total streaming payouts…” 

Some listeners make a point of supporting the lesser-known artists they care about through means other than streaming. Ana Fingerson, a fourth-year communication and media studies major, said, “I stream music from all the bands I love but tend to only go to concerts or buy merch for smaller bands. I think it is important because it helps fund more music in the future for them as well as more tours.” However, listeners like Fingerson are arguably the rarity. As a result, Spotify and other services are slowly but surely homogenizing music, by only paying livable wages to already thriving artists in popular genres, and paying less per stream to artists in niche genres like jazz, bluegrass and classical.

For Aaron Marcus-Willers, a 2022 music graduate, the root of this problem lies in the changing perceptions of music’s monetary worth. “[Streaming] forces new artists to basically give away their art for free in the slim hopes of making some payout by different means somewhere down the line,” he said. “It’s exciting that both making and listening to music have become so easily accessible, but I think it has also come at the cost of a decrease in the perceived value of the art form for both consumers and musicians, and a market that is more saturated than ever.”

Thankfully, some are working to change this flawed paradigm. This past summer, Michigan Congresswoman Rashida Tlaib met with the Union of Musicians and Allied Workers, a group who, according to Rolling Stone, “gained particular attention for its Justice at Spotify campaign, calling on the streaming giant to start a baseline payout of one-cent-per-stream.” Tlaib worked with the group to craft and introduce a resolution, which requests that the federal government establish a music royalty program that pays artists “fairly and directly,” on a “per-stream basis.”

Marcus-Willers sees this resolution as a promising step forward, but emphasized that it would present new complexities and challenges. “The penny-per-stream model is a great starting point for slowly changing the trend of the devaluing of music, but the biggest issue would be convincing listeners to shell out more money per month for their streaming platforms of choice,” he said.

There is clearly a long way to go for ethical streaming compensation for artists. But if we value the ongoing presence of authentic, diverse music in our lives, there are no other options but to raise awareness, and vote for candidates who prioritize the preservation of the arts. If we wait too long to address the inequities that exist, we may be stuck with a cookie-cutter musical landscape, where one artist’s content is indistinguishable from another’s. We’re already well on our way to this reality.