Isn’t it ironic, as Alanis Morissette would say.
Isn’t it ironic, as Alanis Morissette would say.
Music streaming has entirely toppled the way that people traditionally pay for music, in favor of the consumer. Instead of $9.99 per CD, most of us now pay around that much a month (often less with the insane number of promotional packages and discounts that are alway going on) for a buffet-style subscription to a music-streaming service like Spotify $SPOT or Apple $AAPL Music.
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The latter has just struck a new agreement with Warner Music Group—one of the three major record labels that rule the music industry—that allows it to pay a smaller percentage of subscriber revenue to the label than before, according to a report from Bloomberg. What does that mean? Two things. First: Apple Music, at two years old, is doing quite well and has garnered enough negotiating power to strike such a good deal for itself.
Secondly, it means that musicians will be paid even less money than before: a gripe that many of them have repeatedly made over the course of music streaming’s rising domination, to hardly any avail. Recall Taylor Swift’s two-year beef with Spotify that proved totally futile when the singer, who is currently preparing to release a new album, quietly put her catalog back on the service this summer. Streaming has even forced a 69-year-old rock legend to go back on tour because he gets no more income from album sales. Beyoncé may be the world’s highest-paid musician—but only 10% comes from the music itself.
While Apple Music’s deal for now only affects artists who are signed with Warner, industry experts say they expect the other labels to follow suit and cave on lower payout rates—because streaming is still growing so quickly, rights holders have no choice but to agree to terms with which they’re presented, however unfavorable.
The ideal situation, of course, would be that Apple Music—and music streaming in general—booms to such size that it can save the entire music industry, which had been flailing toward financial despair for the last several decades after it was disrupted by the likes of Napster, Limewire, and iTunes. But streaming’s great-for-fans-and-bad-for-artists business model means that things right now may just be one step forward, one step back.
