Guest post by Emily White, Whitesmith Entertainment
This article is second in a series of guest posts exploring the streaming issue from multiple angles, with a focus on how independent players are impacted. For another take, check out this post from Joe Steinhardt, owner of independent label Don Giovanni Records.
Legal streaming is something I had been awaiting for years as a music fan. It took our industry over a decade to finally release platforms that are seamless for consumer use as opposed to suing fans in the Napster era. As I’m all about things that make sense, as a fan, I couldn’t wait; championing this concept in 2010 right before it came upon U.S. shores.
I am in a unique position in which I deeply understand how we got here from a business model perspective. Spotify ultimately had to do “deals with the devil” as far as many of my indie artists and label friends are concerned to get in bed with and legally make major label content available in streaming form so the vast majority of released music could exist in this state in the first place. Spotify paid A LOT of money for this to happen and yes, of course, major labels are also invested in this concept.
Meanwhile, there has been an outcry amongst just about everyone else in the ecosystem proclaiming that this isn’t fair. On one hand, I don’t think Spotify had a choice and understand this. I applaud them for taking that step so modern and legal streaming can exist in the first place. (Of course there are other streaming platforms Rdio, Deezer, Rhapsody, etc., but Spotify is the brand name for a lot of hate, deserved or not).
Despite understanding the business and how we got here, I have devoted my life to championing and defending artists’ rights. Similarly, as a commission based manager, my income only exists in that respect when my artists make money. The point is, I deeply get both sides.
Ultimately, artists are frustrated due to lack of transparency and fairness. Meanwhile, when recently loading music onto an underwater MP3 player before going to workout and swim some laps, I was slightly annoyed for a moment when I realized this would take 15 minutes (vs. streaming which is instant). Quite the first world problem, however, I was anxious to begin exercising to wrap up a long work day. I thought to myself, “This is why people love streaming. It just works.” Let alone the fact that I can take virtually all music sans The Beatles with me on the subway, to the beach, around the globe and not have to bog down my devices with files (or drag around physical CD’s as I did growing up).
Here we are now with legal streaming platforms and artists feeling lost with regard to transparency and equality. As I heard Peter Jenner state at the Future of Music Coalition Policy Summit last Fall (full disclosure, I’m on the FMC Board), Peter stated “I wish we could just knock these deals down and start from scratch, building everything up in a way that is fair and makes sense.”
Initially I found that statement depressing, because it seemed impossible. However, my thoughts shifted throughout these collective experiences resulting in the following proposal for our industry:
Why don’t we create a platform in which rights holders upload their music and everyone splits the revenue that is earned equally? Artists are upset about getting paid fractions of pennies and regardless, that model is not sustainable as it is not derived by the amount of users or income. We should be dividing the revenue that is earned on a streaming platform equally to all who are on it 50% to the person (love when it’s the artist) or entity who controls the master and 50% to the songwriting side.
The artists / rights holders can vote on what the monthly price point is resulting in an average that sets the public’s price point. No one can then complain about a “Free” tier (which of course is not free, it is adsupported), or that $9.99/month is too low. I don’t know what the sweet spot is, $15/month? $150 /year for a bulk discount? Each artist / rights holder has a say and therefore dictates the average and final consumer facing price. Let the content creators decide and set the price point.
Then divide all revenue up per stream. Yes, it will get tricky depending on how long someone listens to a song, but let’s count listening to at least 50% of a strong as a full stream. Say there is $100,000 USD in revenue generated. Or $1M USD or $100M USD. It is a sustainable model in which everyone is paid equally and fairly. It’s true that smaller artists will make less. But ultimately one can’t complain if they are getting their fair share. The more fans that participate, the better it is for everyone. The more people who listen due to Taylor and Thom and whomever else, the more there is for all artists and content creators, with everyone getting their equal take in the end.
Another major win for the industry that I feel is all too often overlooked by larger entities, is Bandcamp. $97 Million USD has flowed through Bandcamp’s platform to date (When I initially wrote this piece in December, it was $92M; a $5M increase in just 3 months!). However, I am constantly battling and educating labels on what Bandcamp is and why we should have our artists’ music there . Here we have a platform in which an artist said to me and her label recently “Why would we prevent a fan from giving $100 to my album if they want to? Why limit the price point of downloads to $9.99?”
Thus, for this proposed streaming model, I am adding in a download option in which the artist / rights holder sets their own / minimum price point for the fan to name their own price if they’d like for downloaded content and 100% goes to master / songwriting (50/50). On the streaming side, artists make their equal share from the pot based on the stream. With regard to downloads, the artist / rights holder keeps 100%.
Let’s talk about that 100%. Right now, digital retail and streaming outlets such as iTunes and Spotify take about 30% off the top. That’s fine, I happen to be writing this from America and these are for-profit companies who have teams and technologies they need to pay for.
Garth Brooks is proposing an iTunes alternative that takes 20% off the top to undercut iTunes. Bandcamp takes 15% or less, undercutting this concept further, giving more to artists / rights holders than any platform, other than a true direct to consumer option.
What I’m proposing here is 0% going elsewhere and 100% going to artists / rights holders.
How do we pay for this? It is up to the artists themselves and caring donors to give back to this model and concept so it can run and there are folks to ensure the platform exists and is execute on properly. To begin with, yes there are expenses for the technology and team. As with any nonprofit, these funds must be allocated before payouts can truly begin. However, as the concept and platform grows, this nonprofit can be funded by grants and private donations and the dream would be for all costs to be covered this way, so a true 100% of revenue can flow to artists / songwriters and rights holders.
And on the fan side? Why do you think Bandcamp is working? Because they take a smaller cut than other service providers and operate a company where much of the work is done by content creators. There are educated consumers out there who WANT to support artists and content creators as much as possible. However, the average fan is so confused with the amount of misinformation out there that they don’t know where to turn.
Thus, I am proposing the above equal and fair streaming model intertwined with the best rate for a download option in the world:
● Everyone works together.
● Everyone is paid equally and fairly based on transparent revenue that comes in, with funds paid out to rights holders based on their percentage of music streamed.
● Artists / Rights holders keep 100% of download revenue after nonprofit expenses and possibly 100% moving forward should enough grant & private donation funds come in.
● Artists understand the model
● The public understands the model and are empowered by it. Of course this isn’t every music fan, but we are all aware of the amount of informed consumers out there who actually do pay attention to how and what their money goes towards.
Can we all work together and do it? I’m not sure, though I do hope so. As this is a utopian and transparent concept, I wanted to put it out into the world instead of building it behind the scenes. That said, apparently the U.S. government agrees! I applaud the U.S. Copyright’s Office Music Licensing Study calling for transparency in payments as well as equality, amongst other elements, and I couldn’t agree more. Similarly, this concept isn’t to knock other services. As an artist manager, I want my clients’ music in all legal and available outlets so no fans are missed.
I truly believe the vast majority of people both on the artist and industry side got into it because they love music. We are one music community who has more in common with each other than not. Ultimately, if we all work together, everyone one wins. Of course winning means something different to each individual and group; but if we build a streaming model that is equal, fair and transparent, how can one complain? When meanwhile an option exists for the most hardcore fans to support the artist directly (not to mention that I would propose sharing all email addresses and city / state / country data of fans who download the artist’s music with the artist; stating that clearly for the consumer of course).
I’d love to see everyone work together. I’m ready to make this work if you are.
(image via Shutterstock)