Spotify has struck a major four-year sponsorship agreement with Barcelona worth $310 million. MBW calculated that in order for an artist to generate $310 million in recorded music royalties on the Spotify platform – at $0.00348 per-stream average rate – they would need to rack up a gigantic 89.08 billion plays on the service. No artist in the history of Spotify has ever, across their entire catalog, attracted that many plays. The most cumulative streams ever recorded by a single artist on Spotify is Drake with 62.84 billion.

Brothers of band
November 17, 2021

TIDAL launches user-centric royalties system

TIDAL is planning to launch a user-centric royalties system for a new $19.99 HiFi Plus membership option, Music Business Worldwide reports. Starting in 2022, the music streaming service is planning to adopt what it calls a 'Fan-centered royalties' approach where royalties attributed to HiFi Plus subscribers will be paid based on their individual streaming activity as opposed to the industry-standard method of aggregating streams and paying out to artists from a pool at the end of a payment period. TIDAL has also launched monthly direct-to-artist payments, which will see a percentage of HiFi Plus subscribers' membership fees directed towards their top streamed artist. TIDAL was acquired by Jack Dorsey's fintech firm Square earlier this year for over $300 million.

Rolling Stone covers the story of R&B and disco star Johnnie Taylor whose family claims Sony hasn’t been transparent with royalty payments for his music. Music royalty manager Tim Langridge gives a simple albeit shocking explanation: "Nobody knows royalties; even people [who work in] royalties don’t understand it”. The system, he says, is “so convoluted and crazy so artists don’t understand it. Of course heirs don’t understand it, and most people in the music business don’t even understand it”.

Breaking the law, making the law
July 15, 2021

British politicians say royalties should be split 50/50

The Digital, Culture, Media and Sport committee of the UK parliament is calling for a "complete reset" of the market, with musicians given a "fair share" of the £736.5 million that UK record labels earn from streaming. In a report, they said royalties should be split 50/50, instead of the current rate, where artists receive about 16%, BBC reports. Musician Tom Gray, whose #BrokenRecord campaign prompted the inquiry, said "It feels like a massive vindication. They've really come to the same conclusions that we've been saying for a very long time".

Portishead have released their 2015 cover of ABBA’s 'SOS' exclusively on SoundCloud, utilizing SoundCloud’s “fan-powered royalty” system, whereby revenue from its streams is driven directly by the artist’s fan base, Variety reports. The fan-powered system means royalties from each listener’s subscription or advertising revenue are distributed to the artists they actually listened to.

MBW goes into some fun music math regarding Queen: the British rock band generated £41.95 million ($58.1 million) in 12 months prior to September 2020, with royalties amounting to £41.67 million ($57.7 million). In FY2019 (the 12 months to the end of September 2019), Queen Productions Ltd generated £72.77 million ($100.8m), of which £71.53 million ($99m) was from royalties. On the other hand, Hipgnosis Songs Fund takes 18 multiple as a reasonable reflection of the market value of gold-standard music publishing rights today. In the past three years, according to Queen Productions Ltd, the band’s rights have generated some £134.5 million ($186 million) in royalties. That’s an average across these three years of $62 million per annum. So, an 18 multiple on $62 million would make Queen’s royalty-bearing rights worth - $1.1 billion today.

SoundCloud is introducing what it calls “fan-powered royalties” – its own branding of the user-centric royalties model – which it says will mean each SoundCloud listener’s subscription or advertising revenue is distributed among the artists that they listen to, rather than their plays being pooled, MBW reports. “Fan-powered” royalties will launch on SoundCloud on April 1, the platform suggests the move will “benefit rising independent artists with loyal fans”, and cites two independent artists currently operating on SoundCloud – Chevy and Vincent. Chevy currently has 12,700 followers on SoundCloud, Vincent has 124,000. By switching these artists to a “fan powered” model and away from ‘pro rata’, based on their recent playcounts on SoundCloud, the service estimates that Chevy’s monthly royalties will grow 217%, while Vincent’s will multiply by five, up from $120 to $600. Fingers crossed!

Big money - not big enough
February 27, 2021

Spotify paid out $5 billion in royalties in 2020

Spotify CEO and cofounder Daniel Ek said the company paid out $5 billion in royalties in 2020, Spotify reports. Chief content officer Dawn Ostroff announced that over the last four years, the number of recording artists whose catalogs generated more than $1 million a year across recording and publishing is up over 82% to more than 800 artists (the majority of money is still going to the labels), and the number generating more than $100,000 a year is up 79% to more than 7,500 artists. Spotify this week also announced that it will be introducing a hi-fi option later this year.

Spotify, Apple, Amazon, YouTube, Pandora and 15 other digital service providers paid out a total of $424.38 million to the Mechanical Licensing Collective in accrued historical unmatched royalties, Forbes reports. It's 10 years of royalties DSPs have collected but couldn't match countless songs to their writers and publishers, so they just - sat on that half a billion dollars. In addition to their payments, the DSPs also delivered more than 1,800 data files, which contain in excess of 1.3 terabytes and 9 billion lines of data. The MLC is now reviewing and analyzing the data in order to find and pay the proper copyright owners.

SpotiFarm
February 10, 2021

How to become a millionaire on Spotify?

Just a very funny article in Vice about how to become a millionaire on Spotify by playing your music on your own computer, or rather on a lot of computers. You need 30-second songs - once a track is 30 seconds in, it counts as a stream. Continuously streaming 30-second songs for 24-hours on one computer nets you £7.89 per day. You need those songs to be played all day, every day, for a year, on 360 computers, and at the end of that year – you’ll have earned over £1,000,000 in streams! Genius; well, at least in theory.

Decades before Merch Mercuriadis's Hipgnosis Fund started spending billions of dollars on famous artists' catalogs, David Bowie did a similar thing. In 1997 he sold 10-year-security on his entire catalog for $55 million to Prudential Insurance at a fixed interest rate, backed by the royalties from his pre-1990 master recordings and publishing. In essence, he gave up a decade's worth of royalties on 'Heroes', 'Life on Mars', and everything else in exchange for an immediate payout, MusicREDEF reminded us and started a thread about it. Last 12 months Bob Dylan, Shakira, Imagine Dragons and many others did a similar thing - it's a lasting deal, not just 10 years.

Over 6,000 musicians, producers, road crew, and other industry workers had signed an online petition demanding a penny per stream royalty from Spotify, which is about triple what Spotify is currently paying. It might, however, be too much for the Swedish streaming company - "If Spotify's model can’t pay artists fairly, it shouldn’t exist", Union of Musician and Allied Workers says, according to CoS.

he European Court of Justice has ruled that record labels will be forced to pay performers an increased share of revenue collected from the broadcast and public performance of sound recordings, Hot Press reported. The ruling makes it clear that each time a musical work generates a payment to the record label for broadcasting or public performance, the performers on that recording are entitled to receive an equal share of earnings, by now it was approximately 20%. Phonographic Performance Ireland has argued that the rule of equal share could not happen where Irish performers did not receive similar payments from non-EEA countries. The EU court ruled, however, that EU law precludes a member state from excluding performers who are nationals of non-EEA states from the right to a single equitable remuneration for the playing of recorded music, Law Society reports.

It's raining' money, halleluyah!
August 21, 2020

Hundreds of AWAL artists earn $100k a year from streaming

Independent record label and distribution company AWAL says that “hundreds” of its artists now earn more than $100k a year from streaming, and that the number of artists who reached the 6-figure mark has grown by more than 40% in the last year, Music Ally reports. The company also said that “dozens” of its artists earn more than $1m from streaming every year. In march 2018 AWAL’s parent company Kobalt said that hundreds of artists were then earning more than $50k a year. AWAL has 40,000 artist and writer clients.

Swedish music company Soundtrack Your Brand teamed up with Spotify to create a platform that allows small business owners like bars, restaurants, and retail stores to easily stream music for 30 to 40 dollars a month, Rolling Stone reports. SYB inked unique licensing deals with Sony and Warner, alongside indie music association Merlin, and on Tuesday the company announced a new deal with Universal. The biggest study on background music to date found that 88 percent of businesses play music four or five days a week without a license, and 86 six percent are prepared to pay for an improved service.

"Gone are the days when a musician could afford to take all the time they need to carve and craft the next ‘Loveless’ or ‘OK Computer’" - NME's Mark Beaumont writes, looking back in anger to Spotify’s CEO Daniel Ek words that “you can’t record music once every three to four years and think that’s going to be enough". But, there is a solution - streaming platforms like Spotify should "work with the labels to reconfigure their increasing profits to ensure that all artists get the fair share they deserve from their streams and can continue making and releasing music as and when they want".

"Some artists that used to do well in the past may not do well in this future landscape, where you can’t record music once every three to four years and think that’s going to be enough" - Spotify CEO Daniel Ek told in a Music Ally interview, but, he claims - "from the data, there are more and more artists that are able to live off streaming income in itself". He offered a piece of advice: "The artists today that are making it realise that it’s about creating a continuous engagement with their fans. It is about putting the work in, about the storytelling around the album, and about keeping a continuous dialogue with your fans". Ek's statements have rankled musicians around the globe - Exclaim collected those.

UnitedMasters is bringing a shift in music ownership - they are offering artists to either let the digital distribution and tools company take a 10 percent cut of their royalties, or pay a $5 monthly fee and keep all the royalties to themself. Artists who pay the monthly fee will have a chance to have their music be considered by ESPN. Seems an obvious choice for any artist whos monthly revenue from streaming music services is $50 or more. The company says it has distributed and promoted music for more than 500,000 artists across all the major streaming services and social-media sites.

CMU published a two-part podcast where they examine the debate around the fairness of streaming royalties for artists and songwriters (part 1, part 2). They discuss the subscription prices, how much is a million streams really, user-centric royalty distribution etc.

User-centric payout is a different way of distributing streaming royalties to the current ‘pro-rata’ system. MusicAlly explains: If an artist (Moses Sumney, say) got 1% of the streams in that period, then his rightsholders get 1% of the royalties pool. But what that also means is essentially 1% of the royalties generated by every individual subscriber are going to Moses Sumney’s music, even if they didn’t listen to him at all. In user-centric model, for each listener, the royalties portion of their subscription is divided only among the rightsholders of the artists they listen to. If they’re a hardcore metaller, folk or classical fan, that’s where the royalties go. If they only listen to Moses Sumney, his music secures 100% of the loot. Whether smaller artists make more money and big artists make less in this system is not always clear.

Mabel

Musicians and songwriters in the UK received a record amount of money last year - £810m, a rise of 8.7% compared to the previous year, BBC reports. PRS for Music, the body that makes sure 145,000 songwriters, composers and publishers in the UK are paid when their music is played or performed around the world, is warning, however, that the Covid-19 would result in an "inevitable decline" in 2020 and 2021.

This month saw the streaming site introduced a function that allows listeners to tip specific artists they like, much as you might once have dropped a pound coin into a busker’s guitar case or compensated a starving bassist with van-based sexual favours... Should musicians depend on charity and goodwill to survive, making them ever more reliant on a platform making vast sums from their efforts alone and paying them a pittance? Now they’re posting monster multi-million-dollar profits, Spotify need to be rapidly increasing their payments until their suppliers – the musicians – can make a fair living off of significant streams - Mark, My Words takes a clear stand in his latest blog post.

“The Black Box” royalties is a growing sum of undistributed and/or undistributable royalties that have been collected on an artist’s behalf, and what happens with it is a hotly debated topic within the industry, as every collection society that has one deals with these unclaimed royalties differently. The Future of What uploaded a podcast about the subject John Simson (American University), Wayne Milligan (TriStar Sports & Entertainment Group) and Steve Ambers (SOCAN).

Speaking in a new interview, Slipknot frontman Corey Taylor took aim at exploitive royalty rates - “A million streams on YouTube is 0.04 percent of a penny. On a million streams you get $400". He thinks it's bad business for everyone, including the companies: "The streaming services are not willing to pay the talents who write the songs and makes the music and yet they are sitting on billions of dollars. They are buying whole blocks of buildings and then taking over floors in there and yet they don’t want to pay the people who made the money for them".

UK artists were paid £746 million in 2018 for their tracks being played, and that was record high - a rise of 4% on 2017. For the first time, PRS for music, which collects the royalties for artists, counted songs used on Facebook and Instagram Stories. But, as singer-songwriter Ruth-Anne Cunningham says to BBC, "a […]