Labels And Spotify Still Struggle To Convince Some Artists On Stream Rates

The debate over whether artists get enough money from streaming played out in public last week when EMI and Spotify executives failed to win over two sceptical EMI acts during an industry seminar.

Music artists must rack up 80 to 200 music streams to earn royalties equivalent to one download, according to data compiled by analyst Mark Mulligan.

Pink Floyd manager Paul Loasby and Marillion musician Mark Kelly disagreed with EMI digital business SVP Cosmo Lush and Spotify content head Steve Savoca at MusicTank’s streaming music seminar in London.

“As a punter, I love Spotify – as an artist, I’m worried,” said Kelly, whose band has pioneered fan-funded releasing.

Loasby said: “The music is so undervalued. The rightsholders, in my opinion, have sold it too cheaply. I would like to see the money paid to artists dramatically increase.”

Despite a period of tension during which Spotify was courting label licenses, label executives are now Spotify advocates. On stage at the seminar, EMI’s Lush made a gesture of handing his card to Kelly, saying:

“Come in and have a conversation. These very small numbers on streams do add up. We renewed (with Spotify) just under a year ago and we fought very hard and for a very long time to secure good terms.

“Revenue we receive from streaming services is much more equitably split amongst artists because more of it is catalogue listening – not just folks who are lucky enough to be in the top 10 or 40.”

And Spotify’s Savoca – Domino Records’ former digital head – naturally concurred, urging Pink Floyd to join Spotify just as Bob Dylan did recently:

“Consumers previously disinclined to pay for music are now paying £120 a year. If there is no cannibalisation, we can agree all the money being generated is incremental – this is a good thing.”

Grumbles and streaming blackouts rumble on from individual artists, some of which with enough clout pull their material out of streaming services. Such pull-outs are few and far between but do include Adele and, for a period following release of its latest album, EMI’s flagship Coldplay. Lush declined to talk about Coldplay with paidContent.

The conceptual difference between an ephemeral stream and a permanent download is one key sticking point in the debate, as the unlimited-access age nevertheless gives consumers repeat access to their favourite songs on a rental basis.

Relative to radio, however, streaming pays artists much more. Some 5,500 UK radio plays are required to equal royalties from one download, Mulligan’s research suggests.

For some acts, their suspicion may be based more on the linkage between low royalties from ad-funded streaming and otherwise acceptable rates from premium services.

“In 2007/08, Pink Floyd were on every single ad-funded stream service going,” band manager Paul Loasby told the MusicTank seminar. “We did 14 million streams. Of those, we earned just over five figures.

“When it came to renewing our deal with EMI, we decided we did not want to go with ad-funded but agreed to go on subscription ones (only). But, when we went to Spotify’s office in 2010, we were declined – it was all or nothing.”

This freemium balance goes to the heart of Spotify, which believes it must give away some music for free in order to convert users to pay. “More people are paying for Spotify in Sweden than are using the free service,” Savoca said. Spotify has been operating longest in Sweden and has a benficial telecom and TV bundling deal with Telia.