Streaming and Scheming: The Impact of Streaming Services on the Music Industry

Streaming and Scheming: The Impact of Streaming Services on the Music Industry

by Vivian DiSalvo

Not too long ago, listening to music meant sifting through a shelf full of CDs or vinyl and listening to a full album front to back. Nowadays, you can listen to what you want, when you want. Sounds super convenient, right? Even though streaming services have revolutionized the music industry for consumers, they have detrimental effects on artists. What exactly have streaming services done to the music industry? Let’s plunge into the negative impacts of streaming services on the music industry.

The Music Modernization Act

 It has become increasingly difficult for artists to earn royalties and rights to their music. Most streaming services find ways to exploit artists, so much so that in 2018, the Music Modernization Act (MMA) made efforts to change copyright law in order to make the music industry fair for artists. Still, streaming services continue to find loopholes that make it hard to live as a musician. A prime example of the exploitation of streaming services comes from famed rapper Eminem. According to Jillian Dahrooge, the MMA requires that “streaming services must obtain a mechanical license for every work digitally streamed.”

Spotify chose not to comply with this portion of the MMA, instead filing some of Eminem’s music under a different portion of the MMA, citing his music as having “no known owner.” This meant that Spotify was able to unfairly keep Eminem’s royalties for this portion of his music – royalties that rightfully belonged to him. The MMA made a good effort to fix the inadequacy in the music industry, but the issue is far from resolved.

Photo by Charles Deluvio

Artist Compensation

Even when artists do receive their own royalties, it’s often nowhere near enough money to pay the bills unless you have an established following. In fact, most artists on Spotify are only paid “between $0.003 to $0.005”per stream, according to Ditto Music. For reference, artists used to receive at least 10% of royalties (though it could be negotiated as more) from physical albums, with most making around $1.50 per CD. Since vinyls average $20-$30 per record, artists would make at least $2 per vinyl sold. Even though it’s not a lot, it’s still way more than artists get paid per stream, which means that smaller artists trying to get on their feet make almost no money from streams. Streaming services might be innovative and suitable for consumers, but they are definitely less than ideal for artists.

Marketing & Demographics

In addition to this, streaming services create difficulties for artists to generate revenue because they make it difficult for artists to cater and market to one specific demographic. Since there are so many different streaming services (Spotify, Apple Music, and Youtube to name a few), marketing to audiences is difficult. For example, artists will sometimes do special promotions with listeners, such as when Luke Hemmings released special edition cassettes to his Spotify listeners or when Dominic Fike released a recording of one of his concert shows only on Apple Music. Artists can’t cater to one platform without neglecting another. How can artists promote their music and generate revenue when there are so many different types of consumers to market to?

The Future of the Music Industry

When looking to the future, it’s hard to predict what the prospective outlook of the music industry will look like. Coalitions such as the Artists Rights Alliance are working to get more legislation passed to make the music industry a more equitable and fair place for artists. Artists like Taylor Swift, who fell victim to the exploitation of the music industry, are using their influence to push for more transparency and improved standards in the music industry. At the rate we’re going, it seems like streaming services are going to continue to exploit artists until consumers start to hop on board. Nevertheless, it’s hard for consumers to advocate for artists because when artists get paid more, consumers have to pay more. 

Many believe that if streaming services and record labels gave a bigger portion of revenue to artists and those who are part of the creative process, artists could receive more royalties from streams without having to raise the price for consumers. After all, fans run the music industry – once the fans are off board, the industry is at risk. If we really want to enact change, we need to stand with artists and reject the injustices that streaming services have caused. We need to say goodbye to streaming services and hello to better rights for artists!

What can you do to help?

Please consider donating to MusiCares on our website to help artists! Other places you can donate to help out artists everywhere:

AGMA Relief Fund

CERF+ Artists Safety Net

Musicians Foundation

Music Maker Foundation

*Cover Photo by Eric Krull

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