This week, it has been announced that music streaming service Spotify is to be sued for $1.6 billion (the equivalent of £74 million), for hosting songs that they don’t have rights to. This is the latest of a string of legal actions that Spotify has faced in the last year.
A Californian company called Wixen, which gathers royalties on behalf of the likes of Tom Petty, Janis Joplin, Neil Young, The Doors, The Black Keys and Journey state that Spotify have taken a shortcut when it cut agreements with key record labels to host back catalogues.
First of all, artists have to rack up over a million streams in order to actually make proper money. Spotify pays between $0.00121 and $0.00653 per stream. Depending on whether the song is played within Spotify Free (which is ad-supported) or on Spotify Premium. This means that to actually earn a decent amount of money from Spotify, a song has to reach a serious number of streams, which is usually only achievable for major artists.
Another major factor is the fact that artists believe that streaming services devalue music.
Music fans have a database of music at their fingertips for free when it comes to Spotify and therefore this leaves many with no reason to pay. This may be seen as the main issues that artists currently have with streaming services, they don’t like their music being given away for free. Many artists have pulled their music from services like Spotify, based on the feeling that their art is valuable and that streaming devalues that.
Companies like Spotify also tend to prop up large record labels and artists, instead of giving up and coming artists the recognition. It has also previously been claimed that for independent and ‘smaller’ artists, their payout is significantly smaller than that of worldwide stars.
This clearly provides the view that the main reason that streaming services cause problems for artists, is due to the fact that they aren’t getting (a lot) of money from it, the solution? Streaming services should pay a decent amount to artists for each stream, and also pay smaller artists the same amount.