Streaming Music Royalties Suck Now, But Just Wait

II think this whole streaming issue will spell itself out. I’ve been thinking about it lately and one thought I have is this. Spotify et al are still relatively new companies and services. Whenever any new digital music company launches; musicians, labels etc. think they are some kind of instant savior that will make all artists and labels finally rich and famous.

But how can that be? Any other new business that launches on a national or international level has massive startup costs, from research and development to salaries and all the other costs of being and growing a business.



Non-digital companies, we have said for years, take at least 3 years to get established, but is that true for digital companies? I think not… I think it takes 4-5 years, if they’re lucky.

Imagine too all the legal and very complicated contracts these companies have to deal with, plus can you imagine dealing with one big record label, or publishing company, let alone hundreds of other big and smaller music companies?

I don’t know. I think Pandora, Spotify etc. as fairly new music businesses, are doing pretty well by the artists considering each recording act has a unique contract with their label/publisher which really is a huge factor when it comes to getting royalties paid to them.

So, in short, streaming music is in its infancy, and acts that complain about how much money they are NOT getting should cool out and look at the long range picture. Look ten years down the road… things will improve as streaming continues to grow and become a true fixture in our world culture.

In the meantime, I think recording artists should just pay attention to the many, many other income streams their music can tap into and basically shut up about streaming rates at this very early stage.

Digital music companies may look like grown-up companies, but they’re not! Babies are babies, and you don’t beat up babies, or toddlers, or teens… let the streaming music industry learn from its mistakes, grow into an adult, and then if crappy royalties are still an issue, which they won’t be down the road, deal with them not as whiners but as responsible and professional businessmen and women.

Christopher Knab © 2013


  • I think the most important thing to consider with streaming music is the exposure an artist can get. It may not be the must fiscally valuable way for fans to listen to music, but it provides fans with an unprecedented level of convenience to discover artists. I also believe that it will help cut down on piracy by providing a legal, yet convenient and ‘free’ alternative.

  • Fair enough about start up costs etc, but surely the “admin” is just a question of code writing? The banks don’t whinge that they have huge numbers of “contracts” with all their customers. Of course Spotify etc. could recompense the artists with higher royalties. What would be REALLY interesting to know would be the kinds of profits they’re making. I think there’s a bigger question here about how the arts in general are valued and funded. I personally don’t know any musicians who don’t also have to have some kind of “day job” as well, however talented they are as musicians, because they’re not making enough money to live off from their music alone. What else is possible here?

  • Stefan

    “Digital music companies may look like grown-up companies, but they’re
    not! Babies are babies, and you don’t beat up babies, or toddlers, or

    I think that is a highly naive stance. if you look at the aggressive (almost) “hostile takeover”-style of companies like Google, we should be a little more careful with the monopolies we are about to allow.

  • yes I think it will work itself out in the end, and then hopefully, those of us who have had our music on for a while, and given it chance to spread through recommendations, playlists and such, will be getting a useful income stream from it.

  • IMO the whole streaming business is just another case of Groupon: they transfer the value from suppliers (artists) to customers (fans). I’ts just a great model for customers because they get valuable stuff almost for free. But you can’t pay the artists decent money if everyone gets everything for 5 bucks a month. That’s why – although hype now – in a long run streaming won’t be the savior of the industry.