Industry Insights: Why Do We Pay Artists So Little?
Endless conglomerations, legal red tape, and streaming contracts make music sales pointless for starving artists in the streaming age, so why not avoid it all and pirate instead?
Industry Insights explores the inner workings of the greater music industry, and what they mean for artists and fans alike.
Written by Raymond Lam
Illustrated by Sophie Beasley
Even in today’s streaming-focused age, most people are able to conjure up memories of uncles burning albums onto CDs and clicking through ads to watch free movies on shady websites. Over time, piracy expanded into other mediums, as streamers began downloading games and movies as a way to circumvent coughing up the dough for the media they wanted. Bowing to consumer stinginess, most entertainment industries begrudgingly accept that piracy’s bound to happen as their audience grows. Shonen Jump Manga Plus, a monthly manga magazine subscription, had to set their pricing at only $3 a month because of the rampant piracy their products were facing.
The music industry had a more subversive way of dealing with piracy, though: make streaming music free for everyone, just riddle it to death with ads. For the fair trade of a few YouTube ads or a 30-second plea from Spotify to subscribe to their premium service, you can peruse your choice of songs, podcasts, and other media for free and consolidate your music however you’d like. If the constant barrage of ads gets too cumbersome, cough up $7 for a dozen-or-so companies’ monthly payrolls, and you’re in. Surprisingly, however, even in this golden age of nearly unlimited legal music access, artist freedom and true independence is a fleeting notion. The illegal, penniless ways of piracy that streaming promised to disrupt aren’t very different in terms of supporting artists’ bottom line.
Take the curious case of artists Neil Young and Joni Mitchell removing their entire Spotify catalogs a few months back. Both cited Spotify’s decision to not take down the Joe Rogan Experience Podcast, which hosted vaccine misinformation personality Dr. Robert Malone, as motivation for completely removing their discographies off the platform, doing so in support of healthcare workers advocating for the JRE podcast’s removal. Fans of Mitchell and Young took to the internet to share screenshots of canceled Spotify subscriptions, professing their newfound loyalty to different streaming platforms (Neil Young snagged up a deal with Amazon Prime Music).
Suffering a pay cut in order to stick up for the essential worker crowd may sound more than reasonable, but in reality Mitchell and Young’s sacrifices probably cut into very little of their income – if they did at all. The data is hard to come by, as it's obscured by brand tie-ins and recording contracts, but as industry magnates, both artists could expect to make much more from touring than the pitiful $0.003 to $0.0084-per-stream Spotify artists can expect to get. Factor that into the 70% cut of the Spotify stipend record labels and managers receive, and Young and Mitchell’s actions seem more like a corporate PR move than a stand against either COVID misinformation or the music industry.
As for finances as a whole, artists only receive about a twelfth of the music industry’s total revenue, and that generosity is mostly made from tours with larger artists that are able to sell out stadiums and hold gigs regularly. Even though streaming’s technically exploded to 83% of all music sales, services like Spotify — after all the intermediaries and labels get their cut — only serve as meager sources of revenue that hardly pay even top artists. In essence, artists that aren’t Neil Young or Joe Rogan are simply using streaming services as a means of exposure rather than for any substantial income.
A good number of artists simply don’t have the audience for touring, though, so for smaller musicians, the only viable option is to throw their dollars at the miniscule music sales made from digital purchases. Vinyl and physical album sales have picked up steam, too, with 20-somethings devotedly decorating their studio walls in 12-by-12 album covers and surpassing both CDs and digital album sales. It’s still an unstable source of overall revenue in the end, but it’s perhaps the most flashy, outward profession of faith towards financial support of your faves.
The more grassroots efforts to fund artists have shown some promise, especially with creators seeking more international audiences without touring as an option. It’s why platforms like Bandcamp, which promises direct-to-artist profits, have taken off. They’re seen as the last ethical bastion of an industry flooded with record deals and pittances from streaming. But that’s still not enough to satisfy vigilantes who truly want to stick it to the music industry. Even as a forum for label-less indie artists starting out, endless charity donations, and special days when 100% of sales go to artists, Bandcamp has not gone without scrutiny. It recently came under fire for its new ownership under gaming company Epic Games (whose nearest ventures into the music business have been the strangely-received pandemic-era Fortnite concerts and acquisition by a media conglomerate bigger than Walmart).
And the stock market nouveau of NFTs have failed on their grand promises of supporting the independence of music through the blockchain. They instead have abetted unsustainable energy crises, art theft, and more PR misadventures for very-online electronic artists.
Bar the rare Bandcamp-supported artist and those 100-million-dollar contracts with Spotify (thanks, Joe Rogan), it’s difficult to understand how music consumption itself — streaming, listening, or physical sales — is enough to support any artist. Music listening is easier than ever, yet artists are getting an infinitesimally-small sum of revenue each passing year. Why not subvert the music industry altogether and just pirate everything?
Of course, doing so would be a symbolic gesture, as the net impact of a mass-piracy movement when streaming’s an infinitely more convenient alternative would probably be more self-congratulatory instead of appreciable change in music revenue. The Reddit community r/Piracy is more abound with piracy memes than the technical know-how and techniques forum members in the 2000s would’ve engaged in. And technically, most modern consumers of piracy are simply using streaming, again, albeit on illegally hosted sites outside of US copyright jurisdictions and usually with paid movies and books. Should this endless array of streaming services go down someday (or, an apocalyptic end to the music industry as a whole), piracy’ll still be that last stand basement-dwellers and internet anarchists the world over.
It’s ignoble to believe that piracy is a good alternative to how the current industry runs, acting as more of a cute proof-of-concept than a proper rebellion against the lack of artist pay. There remain few options to support artists in a dizzying industry of digital “units sold” where musicians get paid more for not-music than the actual art they made. Piracy’s a very juvenile solution to the problem. But it’s one that’s not too distant if you’re not all that jazzed to cough up your monthly $10 dues to Spotify again.
This article was added to Industry Insights after its publication, upon the creation of the Industry Insights series.