Not everyone is Psy: music streaming will not save recording artists

January 29, 2013
January 29, 2013

After digital downloads, streaming was supposed to save entertainment industries, allowing them to monetize the digital distribution of their products rather than keep losing to piracy and file-sharing.

The picture appeared complete when artists, too, seemed to have found a solution in streaming. Revenue from “Gangam Style” and related videos netted Psy, the K-Pop phenomenon, and his agent roughly $900,000 in shared ad revenue from YouTube alone as of last month, according to one estimate.

But for the majority of recording artists, royalties from streaming services are just that–streams whose trickle of cents and fractions of cents are insufficient to allow them to get by. Zoe Keating, a musician whose songs have been played on Pandora 1.5 million times, made some money from the streaming service, but only $1,652. For 131,000 plays on Spotify, the London-based streaming service, Keating received $547.71 dollars.

Rolling Stone calculated that recording artists receive roughly 19 cents for every 60 plays, which corresponds with the amounts Keating received from Spotify. (The songwriter gets nine cents for those 60 plays). That’s about one-third of a cent for a single play on Pandora, MOG, Spotify, or Rdio.

It’s better business for those providing the streaming. Spotify, which has 20 million users, collected almost $900 million in revenue last year. Pandora, a publicly-traded American music streaming service, is valued at $3 billion on the stock market. Competitors have sprouted up around the world, including Deezer in France, Anghami in the Middle East, and Saavn in India.

Even artists whose songs are played millions of times cannot expect to make much from streaming. Their best hope might be to view it as marketing, and look for profits in areas that are much less digital. Like concerts and t-shirt sales.

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