According to
a new report by industry analysts Mark Mulligan and Keith Jopling of Midia Research, songwriters are
getting drastically short-changed in the music-streaming economy. An anonymous reader shares an excerpt from the report:
The 35-page report, which is available here for free, lays out both the history of this dilemma and some (admittedly difficult) proposed solutions, but what may be unprecedented is the way that it lays out how skewed against songwriters the new music economy is. A handful of the many statistics from the study follow:
- The global music industry revenues (recordings, publishing, live, merchandise, sponsorship) fell by 30% in 2020 due to the combined impact of COVID-19 and a recession
- Streaming has created a song economy, making the song more important than ever, yet music publisher royalties are more than three times smaller than record label royalties
- Streaming will bring further strong industry growth, reaching 697 million subscribers and $456 billion in retail revenues, but the royalty imbalance means that label streaming revenue will grow by 3.3 times more than publisher streaming revenue
- The current royalty system assumes all songs are worth the same - they are not - and rewards poor behavior that dilutes artist and songwriter royalties
- Music subscribers believe in the value of the song: twice as many (60%) state that the song matters more than the artist, than think the artist matters more (29%)
- They also believe that songwriters should be remunerated properly: 71% of music subscribers consider it important that streaming services pay songwriters fairly
In a section titled "The Songwriter's Paradox," it lays out the ways that the song has become more important than ever, but, paradoxically, the songwriter has less income and influence:
- Big record labels have weaponized songwriting: In order to try to minimize risks, bigger record labels are turning to an ever more elite group of songwriters to create hits.
- The emergence of the song economy: The audience has shift its focus from albums to songs.
- Writing and production are fusing: As music production technologies have become more central to both the songwriting process and to the formation of the final recorded work, there has been a growing fusion of the role of production with writing. This has led to a growing body of superstar writer-producers.
-The industrialization of songwriting: Record labels are reshaping songwriting by pulling together teams of songwriters to create "machine tooled" hits - finely crafted songs that are "optimized for streaming." While the upside for songwriters is more work, the downside is sharing an already-small streaming royalties pot with a larger team of creators and co-writers.
- Decline of traditional formats: Songwriters have long relied upon performance royalties from broadcast TV and radio. However, as the audiences on these platforms migrate towards on-demand alternatives, performance royalties face a long-term decline. Similarly, the continued fall in sales means fewer mechanical royalties for songwriters.
- Streaming royalties: The song is the first in line culturally but it is last in line for streaming royalties. Of total royalties paid by streaming services to rights holders, between a fifth and a quarter is paid for publishing rights to the song. Labels are paid more than three times higher than publishers on streaming. An independent label artist could earn more than three thousand dollars for a million subscriber streams, whereas a songwriter could expect to earn between $1,200 and $1,400, and even then, only if they are the sole songwriter on the track. On average, songwriters will therefore earn between a third and a half of what artists do. After proposing a series of solutions, such as implementing "fan-centric licenses" and revised streaming prices, the report concludes: "What is clear is that today's' song economy is not working as it should and that everyone across the value chain will benefit from a coordinated program of change."
