The Music Industry

I do not steal music, but I do not purchase it, either.  However, I want artists to make money, so let’s hope I don’t end up feeling guilty about what I am about to research.



As a Spotify Premium subscriber since the day I learned about it in 2012, as well as a 14 year subscriber of SiriusXM, I am a prime example of the changes in people’s consumption of music.  I have not bought an mp3, CD, vinyl, or anything of the sort in years. Personally, I do not feel the need to. I have an iPhone, an unlimited data plan, and a love of podcasts and talk radio more than music.  I much prefer the ability to listen to whatever I want at the time I want to do it, and don’t mind paying the subscription fees for both services.

Let’s see how this affects the artists, though.


a song so good, it is spelled two different ways

My first example is “Yah-Mo Be There” by James Ingram.  It was published by Quest Records, which. Quest is owned by Warner Brothers Records, which is a subsidiary of Warner Music Group (1).  On top of that, their parent company is Access Industries out of New York City, which is interesting because I would assume most people have never heard of them.  On top of their communication ventures, they also do business in natural resources and real estate (2).

A second example from my Spotify playlist is “Adult Education” by Daryl Hall & John Oates.  This is an easy example for me to choose because, well, it’s exactly what I am doing right now.  Adult education. It was published by RCA Records in 1984 (3), which is now a subsidiary of Sony Music and falling under the massive Sony umbrella of companies.

My third example is “Little Sister” by the King, Elvis Presley.  It, too, was published by RCA Records, however back in 1961 it was known as “RCA Victor” (4).  That division of RCA has been swallowed up by it’s parents, and like the aforementioned Hall & Oates song, it is the property of the enormous Sony conglomerate.

In all three instances, the money trail breaks down the same.  Actual numbers, however, are difficult to pinpoint because the rates charged to Spotify tend to change and are dynamic.  The more popular the artist, the more they can charge the streaming service. According to Audiam (5), a music reproduction rights organization, as of May 2018 Spotify pays $0.00057295 per stream.  This means that, theoretically, since “Yah Mo B There” has been streamed 5,208,929 times, it has cost Spotify $2,984.46 to carry it. For “Adult Education”, the amount is $1,189.35, as it has been streamed 2,075,843 times.  And lastly for “Little Sister”, that amount is $3,311.82 from 5,780,303 streams. Unfortunately, it is tough to tell if these numbers are exact, because artists such as Elvis are so iconic and popular that Spotify might have to pay more than that standard stream price, and Spotify does not have to disclose it.  In fact according to Billboard, in 2015 the Elvis estate sued Sony Music over digital royalties (6).

The cost to me, the listener, is fairly minimal.  I pay the same amount, $9.99/month for Spotify and $25/mo for SiriusXM and could stream the song a trillion times if I choose to for the same price as streaming it just once.  The average breakdown per song for the average user is pennies. From that, the artist needs to stream a LOT of songs to see a difference in their wallets. According to Rolling Stone (7), if they were selling physical CD’s, they would be making $1.93 each.  The songwriter (if there is one) makes $.91, the label a whopping $9.74, and the retailer an almost whopping $5.40.


makes you kind of want to not publish music, huh? unless you are this guy (hollywoodreporter.com)

It is unfortunate that the streaming model greatly favors popular artists over smaller ones.  For every Drake making serious money from serious amounts of streams, the money made by an independent band trying to get noticed is fairly paltry.  Let’s hope that record labels start giving the artists a bigger cut in the future.

citations
1) Wikipedia - Yah Mo B There (https://en.wikipedia.org/wiki/Yah_Mo_B_There)
2) Wikipedia - Access Industries (https://en.wikipedia.org/wiki/Access_Industries)
3) Wikipedia - Adult Education song (https://en.wikipedia.org/wiki/Adult_Education_(song))
5) Audium - Spotify US Mechanical Rate (http://resources.audiam.com/rates/ )
7) Rolling Stone - The New Economics of the Music Industry (https://www.rollingstone.com/music/music-news/the-new-economics-of-the-music-industry-234924/)

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