The coronavirus pandemic has brought the entire world to a standstill — lockdowns are happening all over the world. More than 10,000 people have died and almost 480,000 people have been infected by the virus. While governments around the world are working on stimulus packages so that people can rebound from the ravaging economic scenarios, people who are likely to be left behind are musicians. Most musicians make money from touring or performing live shows — and since we are in the age of social distancing, they just can’t perform gigs and chances are they wouldn’t be getting gigs for a very long time as venues, sponsors, the audience — all kinds of benefactors would be reeling from the losses caused by this global lockdown caused by the virus. This is why global corporations like Apple, Amazon, Google and Spotify who are the gatekeepers of music on the Internet need to open up their coffers and be generous with the royalties they give to musicians per stream.
Why do artists make more money from performances than streams?
Back in the day, most musicians made money by selling records and albums. That model started to shift in the late ’90s with the dawn of MP3s, portable music players and well, the Internet. Services like Napster propelled piracy of music which brought the industry down massively and it kick-started a trend of musicians touring more often to make up for the deficit of revenue. Till streaming services like YouTube, and later Spotify became popular most people bought their music through services like iTunes and Amazon Music or through sales of CDs at brick and motar stores.
These streaming services changed things further. People started buying albums less and less as through services like Spotify they could get almost all imaginable music on demand through the Internet for a price of the single album per month. On YouTube people could watch a music video for free or in many cases people would upload the entire song which could be heard for free.
This gave rise to the streaming of music. Soon Amazon jumped in, while Google created a music-only version in 2011 called Google Play Music which today is merged with YouTube. In 2015, Apple jumped into the streaming business post the acquisition of Beats electronics called Apple Music.
According to a Guardian report, it has been reported that Spotify pays its artists and right holders around $0.00318 per stream which is a pittance. Apple is known to pay slightly more at around $0.012 per stream while the numbers for Google and Amazon aren’t in the open.
The big three — Apple, Amazon and Google even created hardware businesses around these music streaming services. Apple sells the HomePod, Amazon invented the smart speaker category with the Echo in 2015 and Google has its Google Home Speakers. While Spotify doesn’t sell any hardware, it is deeply integrated with Google’s Home and can also be experienced on Amazon Echo. Almost all of these services have become big money-spinning businesses thanks to music from the artists.
In the case of Google and Amazon, these streaming services have also become big advertising businesses. They are making billions of dollars but paying nothing to artists unless you’re a chart-topping billboard top 10 act.
So Apple, Google, Amazon and Spotify time to pucker up and be fair
To be fair to all the big names in the streaming scene, they have made it easy for millions of musicians to distribute their music without a middle man like the old music labels. While that’s been true, it has also exposed more mediocre music to the masses and shunned people who’ve devoted their entire lives towards making music.
Just to give you an example, an influencer and known personalities like a Paris Hilton or even Iridis Elba would garner more money out of these platforms because of their celebrity. While lesser-known, much more skilled and perhaps better producers wouldn’t get that fair share of the pie. Sensations like Billie Eilish are exceptions to the rule.
Moreover, especially for companies like Apple, Google and Amazon, their streaming businesses aren’t core businesses, but part of their flywheels that allow them to sell more gadgets, ads, services, and attain more eyeballs in one way or the other. Prime Music is part of Amazon Prime which also has a video streaming service and allows lighting fast delivery from the e-commerce site, YouTube Music comes preloaded on most Android phones while the same holds for Apple Music on Apple’s hardware.
These services are a big part of the reasons why people invest in their ecosystems. If there were no music from musicians, these services wouldn’t exist and there would be one reason less to invest in an Apple gadget or invest in Amazon Prime or use an Android smartphone?
Let’s stop hating on Spotify
Spotify is a very different business than Apple, Amazon or Google. It is not a platform company. It doesn’t sell hardware — and it doesn’t have many alternative sources of revenue. Also, it still is not a profitable company despite an IPO just about two years ago.
On the other hand, Apple sells more than 40 million iPhones in just a quarter. It is the most profitable business on the face of the planet. In 5 years despite just primarily being on iOS and macOS, Apple has almost caught up to Spotify with Apple Music, so much so that it can crack exclusive deals with big artists like Taylor Swift and yet pay almost 3 times as much as Spotify.
Similarly, like Apple, Amazon became one of the first companies to cross the trillion-dollar market cap. It is funded by the richest man on the planet — Jeff Bezos — and he’s the richest by quite a margin despite his divorce. Amazon powers more than half of the Internet with AWS, it’s a juggernaut in e-commerce, its Kindle readers are loved by the people the world over and well, its Echo speakers are a big alternative business fuelled by things like music.
Google is another machine. It’s an artificial intelligence leviathan commanding the greatest advertising business on the planet fuelled by its search engine, YouTube and Android. Its hardware unit has also been growing mostly because of the Home line of speakers. Like, Apple and Amazon, it crossed the trillion-dollar market cap and is highly profitable.
Spotify is David in front of these Goliath’s. Yet, it is the David which has announced some things to help musicians because if the musicians go down, Spotify too does. It has partnered with Musicares, PRS Foundation and Help-Musicians to create Spotify COVID-19 Music Relief matching donations dollar for dollar up to $10 million. They are also building a new feature into the app that will allow artists to raise funds directly. For Spotify creator tools, SoundBetter is waving its revenue share.
It’s not much but it is a start.
Apple, Google and Amazon can do much better
Apple is the quintessential music-tech company — it is the damn inventor of the iPod and iTunes. It ought to do better. Music is what revived Apple and allowed it to become the richest company on the planet with the iPhone. The iPhone wouldn’t exist without the iPod and iTunes and those wouldn’t exist without the billions of hours of music Apple piggybacked on— and the initial promise of 1000 songs in a pocket with the iPod.
When U2 released “How to Dismantle an Atomic Bomb” they released the first product red iPod. When Steve Jobs announced the iPhone — he played the Beatles to show off the music capabilities of the iPhone. When Steve died, Cold Play performed at the Apple campus in his honour. When they launched Apple Music they had Jimmy Iovine on stage — and till today Dr Dre and Trent Reznor are part of the team for Apple Music. When the Apple Watch was launched they had U2 announcing and distributing their new album for free to every iTunes and Apple user — that wouldn’t have been for free. When they announced the iPad Pro in 2018, they had Lana Del Rey performing for just about a 1000 people at the Brooklyn Academy of Arts in New York.
They are all about music — so much so last year they launched the Apple Music awards at which they honoured Billie Eilish. If that’s not enough then there is more — they make the Mac Pro, iMac and MacBook Pro — the three are the go-to default computing products for musicians. They also make one of the best digital audio workstations in Logic. They sell the most headphones / earphones in the world with AirPods and Beats.
This is Apple’s domain to lead and they have the money and resources to do a lot for the ailing musicians. They must do better and there are no excuses for not doing so — not even the coronavirus or a delayed iPhone launch.
Google is also equally accountable. A big part of why we are deeply tethered to Google is YouTube. It was the first streaming service for most of us. It was the place we discovered new music and watched music videos on. Hell, it still is. Google’s Android platform is home to the most widely used opening system in the world and the same holds for its Chrome web browser. Most of the world listens to its music through Google’s intervention in one way or the other — be it YouTube, on the Chrome web browser or an Android smartphone or a Google Home speaker. In the case of Spotify, it is powered by Google’s Cloud servers. Chances are your music is coming from Google indirectly, one way or the other.
Amazon also is a big part of this circle. These days musicians are finding safe heaven in TWITCH its game streaming service during the time of the quarantine. They are uploading their DJ sets or live performances on the platform. Before streaming services took over, the western world, Amazon.com was one of the best ways to buy music and still remains the place from which you can buy cutting edge hardware for the sake of listening. Amazon Music also is home to millions of users who listen to their music on the most popular smart speaker on the planet — the Echo. Amazon wouldn’t be a relevant player in the artificial intelligence conversation if it wasn’t for the Echo or Alexa. A big part of the web is powered by AWS which is Amazon’s cloud service which means a lot of the ways indie musicians distribute their music happens through an Amazon platform.
A basic start would be for all the streaming services to triple the royalties for the rest of the year. It may not make business sense, but it is common sense — apart from being the moral and right thing to do.