The Streaming Industry Is At A Turning Point

With over six billion streams, Drake was the most streamed artist of 2017. Therefore, it doesn’t come as a surprise that his latest album “Scorpion” is breaking all the streaming records that he had previously set. Spotify announced that streams of the album were hitting around 10 million an hour. Within 24 hours of its release, the album had reportedly been streamed over 132 million times! For artists like Drake, who also write their material, streaming services can make them millions a year, but for other artists that aren’t hitting record-breaking numbers, online streaming isn’t really providing them with the money they need to even survive.
The standard per song stream rate is $0.005. That is HALF of a penny! To put it in perspective, Drake has made at least $650,000 in streaming revenue from his new album which really seems low considering the number of streams (130 million X .005 = 650,000).  Most Artists/songwriters, who have songs with a normal to even large number of streams, are also not making as much money, as one would think. For example, an Artist/songwriter with 500,000 streams, which seems substantial, would only earn $2,500! (500K X .005 = 650,000) That’s ridiculous. So, who is making the money?  It’s certainly not the Artists/songwriters.
As of January 2018, Spotify had around 70 million subscribers. Each subscriber pays about $10 a month. That’s approximately $700 million a year gross income from subscribers alone.  This number does not take into account the money Spotify receives from other sources of income such as advertisements. The big question is, what should these streaming services be paying the artist that is fair to both the artist and the company while keeping the price of subscriptions reasonable for the consumer?  There is a new law going through Congress, the Music Modernization Act, whose goal is to create laws that will statutorily mandate the amount that songwriters should receive for their work/streams. As you can imagine, there is great excitement about the passage of this law.
Spotify seems to be aware of the need, as well. In an interview with Billboard, Spotify’s global head of creator services said that the company spent the first ten years mainly focused on customer experience, but now they are going to focus on the artists experience helping them to build a lucrative economic bridge to the fans. Let’s hope that’s true! Unfortunately, Spotify is a corporation, its duty is to make shareholders’ money. That said, Songwriters need to be paid a fair wage for the use of their work.  $.005 per stream is not a fair wage!

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