Damon Krukowski of Galaxie 500 and Damon & Naomi breaks down the meager royalties currently being paid out to bands by streaming services and explains what the music business’ headlong quest for capital means for artists today.
I’m sure each generation of musicians feels they’ve lived through a time of tremendous change, but the shifts I’ve witnessed in my relatively short music career— from morphing formats to dissolving business models— do seem extraordinary. The first album I made was originally released on LP only, in 1988— and my next will likely only be pressed on LP again. But in between, the music industry seems to have done everything it could to screw up that simple model of exchange; today it is no longer possible for most of us to earn even a modest wage through our recordings.
Not that I am naively nostalgic for the old days— we weren’t paid for that first album, either. (The record label we were signed to at the time, Rough Trade, declared bankruptcy before cutting us even one royalty check.) But the ways in which musicians are screwed have changed qualitatively, from individualized swindles to systemic ones. And with those changes, a potential end-run around the industry’s problems seems less and less possible, even for bands who have managed to hold on to 100% of their rights and royalties, as we have.
Consider Pandora and Spotify, the streaming music services that are becoming ever more integrated into our daily listening habits. My BMI royalty check arrived recently, reporting songwriting earnings from the first quarter of 2012, and I was glad to see that our music is being listened to via these services. Galaxie 500’s “Tugboat”, for example, was played 7,800 times on Pandora that quarter, for which its three songwriters were paid a collective total of 21 cents, or seven cents each. Spotify pays better: For the 5,960 times “Tugboat” was played there, Galaxie 500’s songwriters went collectively into triple digits: $1.05 (35 cents each).
See my earlier posts from Zoe Keating and David Lowery. It’s interesting that these numbers are being made public while new legislation that appears to prohibit artists from joining together in a union-like group to negotiate better rates. As Krukowski notes, one interesting side note to all of this is that the streaming services aren’t making money, either. Without VCs, it’s hard to see how any of them would be in business by now. As the full post at the link above notes, Galaxie 500 would have to have 312,000 plays on Pandora to make the money they would make by selling one (one!) CD. For Spotify, it would take almost 48,000 plays to generate that much income for the songwriters.
David Lowery’s brilliant reply to an NPR staffer who blogged on the NPR site that of the 11,000 songs she ‘owns’, she actually only purchased 15 CDs of music in her life. There is a bit of confusion about how she acquired the others, but an awful lot of them were stolen. Lowery, of Cracker, and Camper van Beethoven, breaks down the moral and commercial issues very clearly, morally, and directly. As he explains the evil of things like Spotify, he exposes the Free Culture movement as a creation of very large, multi-national corporations who support and profit from stealing because the only party who doesn’t get pain in the end is…the person or group who created the music. Google gets paid either way. Long, very worthwhile read for anyone who loves music and supports musicians. Read the entire blog post here, I really encourage you. If you liked Vic Chestnutt or Sparklehorse, for example, there’s an object lesson to be found in the full post.
Your letter clearly shows that you sense that something is deeply wrong, but you don’t put your finger on it. I want to commend you for doing this. I also want to enlist you in the fight to correct this outrage. Let me try to to show you exactly what is wrong. What it is you can’t put your finger on.
The fundamental shift in principals and morality is about who gets to control and exploit the work of an artist. The accepted norm for hudreds of years of western civilization is the artist exclusively has the right to exploit and control his/her work for a period of time. (Since the works that are are almost invariably the subject of these discussions are popular culture of one type or another, the duration of the copyright term is pretty much irrelevant for an ethical discussion.) By allowing the artist to treat his/her work as actual property, the artist can decide how to monetize his or her work. This system has worked very well for fans and artists. Now we are being asked to undo this not because we think this is a bad or unfair way to compensate artists but simply because it is technologically possible for corporations or individuals to exploit artists work without their permission on a massive scale and globally. We are being asked to continue to let these companies violate the law without being punished or prosecuted. We are being asked to change our morality and principals to match what I think are immoral and unethical business models.
Who are these companies? They are sites like The Pirate Bay, or Kim Dotcom and Megaupload. They are “legitimate” companies like Google that serve ads to these sites through AdChoices and Doubleclick. They are companies like Grooveshark that operate streaming sites without permission from artists and over the objections of the artist, much less payment of royalties lawfully set by the artist. They are the venture capitalists that raise money for these sites. They are the hardware makers that sell racks of servers to these companies. And so on and so on.
What the corporate backed Free Culture movement is asking us to do is analogous to changing our morality and principles to allow the equivalent of looting. Say there is a neighborhood in your local big city. Let’s call it The ‘Net. In this neighborhood there are record stores. Because of some antiquated laws, The ‘Net was never assigned a police force. So in this neighborhood people simply loot all the products from the shelves of the record store. People know it’s wrong, but they do it because they know they will rarely be punished for doing so. What the commercial Free Culture movement (see the “hybrid economy”) is saying is that instead of putting a police force in this neighborhood we should simply change our values and morality to accept this behavior. We should change our morality and ethics to accept looting because it is simply possible to get away with it. And nothing says freedom like getting away with it, right?
But it’s worse than that. It turns out that Verizon, AT&T, Charter etc etc are charging a toll to get into this neighborhood to get the free stuff. Further, companies like Google are selling maps (search results) that tell you where the stuff is that you want to loot. Companies like Megavideo are charging for a high speed looting service (premium accounts for faster downloads). Google is also selling ads in this neighborhood and sharing the revenue with everyone except the people who make the stuff being looted. Further, in order to loot you need to have a $1,000 dollar laptop, a $500 dollar iPhone or $400 Samsumg tablet. It turns out the supposedly “free” stuff really isn’t free. In fact it’s an expensive way to get “free” music. (Like most claimed “disruptive innovations”it turns out expensive subsidies exist elsewhere.) Companies are actually making money from this looting activity. These companies only make money if you change your principles and morality! And none of that money goes to the artists!
And believe it or not this is where the problem with Spotify starts. The internet is full of stories from artists detailing just how little they receive from Spotify. I shan’t repeat them here. They are epic. Spotify does not exist in a vacuum. The reason they can get away with paying so little to artists is because the alternative is The ‘Net where people have already purchased all the gear they need to loot those songs for free. Now while something like Spotify may be a solution for how to compensate artists fairly in the future, it is not a fair system now. As long as the consumer makes the unethical choice to support the looters, Spotify will not have to compensate artists fairly. There is simply no market pressure. Yet Spotify’s CEO is the 10th richest man in the UK music industry ahead of all but one artist on his service.