In a recent interview on the ‘Arroe Collins View From The Writing Instrument’ podcast, Foreigner bassist Jeff Pilson discussed the significance of streaming in contributing to the revenue of the music industry. During the discussion, the bassist explained musicians too go on strike like the Hollywood writers. He explained:
“Well, streaming is a big part of our consideration right now because it’s the primary source of where people listen to music, is through streaming services. And that’s rough on the artist, because the royalty rate for streaming is ridiculously bad. So, for us, it really comes down to — you do your best. We still sell physical CDs, so that’s a good thing. Our audience still does buy physical CDs, so they get to see that album cover and everything, but that’s an increasingly rare thing. So, streaming becomes a consideration because the revenue stream is so much lower.”
The bassist added while mentioning the ‘poorness’ of the streaming revenue:
“I think what’s gonna have to happen here one of these days is musicians are gonna need to do what the actors and writers just did in Hollywood and either come up with a strike or something to renegotiate what streaming revenue is, because it’s really, really poor. And it’s unsustainable. You’re not gonna get people being able to make a living making music pretty soon, and that’s gonna be dangerous. Then the standards of music are gonna go way down — something we are dead set to avoid.”
Why Writers Were Striking
Every three years, the East and West branches of the Writers Guild of America, representing 11,500 writers in the TV and film industry, engage in negotiations for a new contract with major Hollywood studios. Anticipations for these negotiations were high for this cycle.
Over the last decade, television production has experienced significant growth, fueled by the substantial investments made by media companies in streaming services. However, writers have expressed dissatisfaction, asserting that their compensation has remained stagnant. W.G.A. leaders contend that the existing system is flawed, emphasizing that the ‘survival of writing as a profession is at stake in this negotiation.’
Writers emphasize critical issues in AI negotiation, focusing on compensation as a top concern. Streaming impact on working conditions noted, with shorter seasons affecting income. Advocacy for improved residual pay for reruns to support middle-class writers. Opposition to perceived abuses in ‘minirooms,’ small pre-green light writer groups facing lower pay and job insecurity after 10 weeks.
The Problem With Streaming and Spotify
For years, Spotify has faced criticism for providing meager payouts to musicians and songwriters, with accusations that the platform favors major-label artists through playlist placement and other promotional channels.
In an attempt to address these concerns, Spotify CEO Daniel Ek has defended the platform’s payout structure. In an interview with CBS News in early 2023, Ek stated:
“We don’t pay artists directly. [Artists] have their deals with their record companies and their deals with their publishers, et cetera. And what Spotify does is we pay out to those record companies and these publishers, and don’t know what individual deals these artists may have.”
To provide transparency, Spotify launched a website called Loud&Clear three years ago, aiming to clarify the recipients of payments. According to Forbes, ‘Spotify has been paying back nearly 70% of every dollar generated from music as royalties to rights holders who represent artists and songwriters.’ These rights holders, including independent distributors, publishers, performance rights organizations, record labels, and collecting societies, then distribute payments to artists and songwriters based on their agreed terms.
As of September last year, Spotify reported 574 million monthly active users, with 226 million subscribing to Spotify Premium. In the third quarter of 2023, Spotify achieved a rare quarterly profit of $33.88 million, a significant improvement compared to the $249.73 million loss in 2022.
You can watch the interview below.
