YouDon’t Get It

If you’re a songwriter who thinks the real money is in streaming, you may want to rethink how heavily you depend on which sources of income, as some streaming sites are infamous for how little they pay per stream. However, you do, as a songwriter, have a new advocate on your team and it just might surprise you.

It is no secret that streaming royalties are far less than mechanical royalties. What you may not have known is that streaming companies essentially choose their own royalty rates, meaning they will pay only what they want. Typically, when you start up a debate in this area, someone usually spits out Spotify with a load of venom on their tongues. However, Spotify is not the worst culprit. Take a look at this:


The above chart shows how many streams it takes to earn $1 as of 9/14/16. While Spotify is in the bottom 5, the worst offender is YouTube, it taking a whopping 776 streams to make $1; that is $0.0013 per stream. This is all due to the fact that YouTube only recognizes video and not music, therefore allowing looser licensing agreements.

Who’d have thought the mother of all streaming services would be the least advantageous money-generating platform? (Well, the signs were there all along, but we just decided to neglect them.) Are you mad yet? Good. You know who else is mad? The European Union.

That’s right. YouTube has successfully irritated the major government of an entire continent.

Thanks to the petitioning of over 1,000 artists to the European Union, the EU has begun work on an initiative that will legally force publishers and producers, such as YouTube and other streaming sites, to up its royalty rates and reveal to artists and publishers what they have actually made once new rates take effect. The EU also intends for this initiative to go beyond YouTube and into other media and streaming sites. All of this, Europe hopes, will eventually culminate to simpler yet more profitable access to music and media.

YouTube was quick to fire back at the European Union’s grounds for accusation, claiming that “[they] have paid out over $3 billion dollars to the music industry – and that number is growing year on year.” This is an interesting claim when you consider that YouTube only pays 55% of its ad revenue to rights holders and that the majority of those rights holders are with the major labels.

Bottom line, now is the age of the indie artist, writer, label and I think it is absolutely amazing that something as large and influential at the European Union is taking note and, thus, taking action. Given that we’re in an age of transition into the next era of music business,  pay is gonna suck for a bit, but we don’t have to sit around and let it happen. Like the EU is doing, it’s time to demand that the songwriter and artist be paid what they’re really worth.

As for the future of the music business, the intended actions of the EU definitely give me hope. Culturally, Europe is the global standard of societal progression. If other nations, especially the US, pay attention to what Europe is planning on doing, the future is bright for the modern creator. Now, the US has seen its share of petitions to change wages in every area, but, as guided by the European initiatives, it is time for the musicians to stand up, plead their case, and be taken seriously.

If you’d like to read the original articles that built up to this blog post, click here and here.

Once again, this has been the view from 214.


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