Music streaming hits sour note with artists

The music industry has been going through a rough time lately. First it was illegal downloading, blamed for the decline in record sales and revenue at labels, doing countless artists out of their earnings. Industry groups, backed by the labels, have put a lot of time and effort into blocking sites and taking down services that they deem responsible for the copyright infringement.

Now, the music industry has a new bogeyman: streaming. Specifically, low-cost and free services that pay artists and labels a small amount of money every time a track they own is played.

Once hailed as the saviour of an industry that failed to move with the times, streaming has suddenly found itself under attack. The target for the bulk of the ire is Spotify, the commercial streaming service that was founded in 2006.

And it seems that people are lining up to knock the service down. Thom Yorke, lead singer of Radiohead, pulled some of his material from the service, including his solo album and material from Atoms for Peace, and said the service was bad for new music.

Bandmate and producer Nigel Godrich announced the decision on Twitter, calling it a “small, meaningless rebellion”. “Someone gotta say something. It’s bad for new music,” he wrote.

“The numbers don’t even add up for Spotify yet. But it’s not about that. It’s about establishing the model which will be extremely valuable. Meanwhile, small labels and new artists can’t even keep their lights on. It’s just not right.”

The two were supported by Brian Molko of Placebo, who was quoted as saying the service was only interested in making money at the expense of others.

Spotify isn’t alone in offering streaming services. The Napster name was well known several years ago for its contribution to peer-to-peer sharing, but these days, the company is owned by Rhapsody and offers a paid-for streaming service. Available in Ireland since June, Napster has one million paying subscribers with access to more than 16 million songs.

Deezer, meanwhile, has a total of 26 million users across its various offerings, including a free discovery mode which offers unlimited streaming on a laptop or PC for 12 months and limits it to two hours a month after that.

The subscription model has about four million users, offering ad-free access for a flat fee per month. It uses editorial curation to offer suggestions for users, to promote new bands and new releases, rather than depending on algorithms. Crucially, it also links to online stores such as iTunes that allow the user to buy the track outright.

Confidential
Spotify may not be the only streaming service out there, but it is the biggest globally. More than six million subscribers pay each month to access its catalogue, which includes everything from major established bands such as Metallica and Coldplay to up-and-coming artists, including Irish bands such as Kodaline and The Coronas.

Taking to Twitter to explain why, Yorke said the band was standing up for fellow musicians.

“Make no mistake new artists you discover on #Spotify will no [sic] get paid. Meanwhile shareholders will shortly being rolling in it. Simples.”

The main argument is over the amount of money that services such as Spotify pay per stream of a track. The exact amount paid for each stream varies from service to service and according to the deals that are hammered out with rights owners. Deezer said its terms are confidential, but it pays market value.

But it has been suggested that Spotify pays a fraction of a cent per stream. If you are a big name artist or label with an extensive back catalogue attracting a lot of plays, it will soon add up.

It’s the newer artists – who Yorke, Godrich and other objectors say they are sticking up for – that stand to lose out, even if the exposure they get from being on such a service has the potential to make them more popular.

“Streaming is a very different model to traditional models of unit sales. It works on a much longer term basis,”explains Deezer’s Mark Foster.

“ When you buy the CD or the download that’s it – the artist gets paid once and doesn’t get paid again, whether the fan listens to the track or the album once or a thousand times. It’s a single transaction.

“Streaming is a longer term model. The more hits you have the more revenue you generate.”

Because of this, he says, the rate per stream is obviously going to be less than you would pay for a one-time download.

Spotify, for its part, denies the charges of “killing music”, and argues that streaming helps discourage music piracy, where artists and labels were getting nothing.

In one report, it claims music piracy has fallen in the Netherlands since the service launched there, from 32 per cent in 2008 to 22 per cent in 2012.

But although the artists are getting paid something for their work, the Musicians Union in the UK is arguing that it’s not enough and has called for Spotify to increase the amount it pays

The Musicians Union of Ireland said the risk is that people who can no longer make a living out of the music industry as a result of recent developments will end up giving up .

Organiser Des Courtney said the long term future of the arts could be under threat.

“Artists all want their art to be broadcast as widely as possible; that’s how they earn their living. That’s not the issue,” he said. “The issue is how do we protect their image rights and earnings potential in a world where all this stuff is up on YouTube etc and for which artists are not being paid.

Pressure
"[Streaming] may well turn out in the future to be a more effective way of doing this, we don't know yet."

If artists decide it’s not worth their while to continue, that could have other implications, he said.

“The arts themselves will be under tremendous pressure. We won’t have artists if they can’t make a living. It’s a question of trying to find a balance,” he said.

Artists such as Yorke are not against digital distribution – the band famously gave away their album In Rainbows – and the singer is apparently backing a new service called Soundhalo, which allows you to buy and download tracks and videos from live shows shortly after they are performed.

The Radiohead star has vigorously defended his stance on his Twitter feed.

"For me In Rainbows was a statement of trust. People still value new music . . . that's all we'd like from Spotify. Don't make us the target," he said.