So before we scream at the streaming services, let me just make this clear, they pay for the music!
by J.P. Kallio
I know we all are getting bit tired with the “streaming services killing music” saga. But there are still musicians who like to raise their fists up every time someone mentions Spotify or Apple music. Spotify has been transparent about how much they are making and how much of it is paid as royalties. I was aware of this already awhile back. And what they are paying is actually quite substantial amount. Spotify pays about 70% of its revenue as royalties to the labels. And that’s where things get messed up…
I have been trying to figure out what effect this has on most of us independent artists, but as the major labels are good at hiding their tracks, it seems almost impossible. You do need to go through distribution company to be able to get your music on the streaming services in the first place. I use company called AWAL for my distribution. They are part of the Cobalt Label Services. They have a reputation of offering independent artists digital distribution services with transparent Accounting. The do a great job, I must say. And what was most important for me was the fact that I still own 100% of the rights to my music. This means that if at any point I am not happy with their services, I can pull out. In other words, I am in charge.
This is particularly important to me as the music business has a history of major labels swallowing smaller labels. If one of the major labels where to buy the company, I’d expect my self to be jumping ship very fast. And here’s why.
From that 70% of Spotify revenue that the labels get, they pay out from 15% down to 5% to the artists. The rest goes to cover the “expenses” of distribution…
So before we scream at the streaming services, let me just make this clear, they pay for the music! The question we all should be asking is, how can we make sure the artist will get a justified cut? You see the major labels have been getting away with it as long they have been around. They always made more money from the art than the artist did. So this is not new information. In fact in many ways, the streaming services have exposed the major labels.
But the independent artists, who are willing to look outside the traditional record industry are finding incredible ways to finance their art, partly thanks to some great new services (Crowd sourcing, Kickstarter, Patreon, Bandcamp…) and partly to their own creativity, drive and desire to make the art in the first place. In my mind this is the way to go, at least until we get more transparency in the way the labels spend their money.