Hey, hey folks. Short introduction today: I’m taking next week off and will be back on November 4th. If you enjoy the newsletter, recommend it to a friend, co-worker, or the slightly estranged music fan in your life. (You can also support via Patreon here.) Let’s look at whether the conversation around music streaming and musicians is telling the whole story.
David Hesmondhalgh, a professor and researcher at the University of Leeds, recently published a paper titled “Is Music Streaming Bad for Musicians? Problems of Evidence and Argument.” He surveys the recent discourse around digital music, including writers I often cite like Nancy Baym and Liz Pelly. Though Hesmondhalgh is a long-time scholar in the field, this paper sits nicely alongside increasingly nuanced views on digital music's current political economy. (See: the podcast Money 4 Nothing, DeForrest Brown Jr.’s excellent essay “‘Manufacturing Normalcy,” and the ongoing conversation on the Interdependence podcast by Mat Dryhurst and Holly Herndon.) There are several threads to pull from Hesmondhalgh’s paper, but today will focus on two: the problematic idea of a “per-stream” rate and how best to contextualize the issues facing working musicians.
A Naming Problem
Hesmondhalgh starts with a discussion around the idea of using “per-stream rates” from streaming platforms as a proxy for the perceived “fairness” of a streaming platform. He writes (emphasis mine):
In any case, it is important to be clear that MSS do not actually pay according to a per-stream rate. This ‘rate’ is an analytical construct, an average produced by taking the income generated by an individual recording, by an artist, or by a label, and dividing that income by number of streams achieved by that recording, artist or label.
Hesmondhalgh cites “per stream” rate complaints dating back to 2009, when it was reported that Lady Gaga only received $167 for a million streams of her hit “Poker Face” on Spotify. The context he provides, which was lost in the media coverage, is that this was only for Gaga’s songwriting royalties in Sweden. Still, the narrative was set. This “analytical construct” it has since been used as a stand-in for a perceived gap between fan engagement and artist payment it as a stand-in for a perceived gap between fan engagement and artist payment. While that gap may exist, the phrase is an inexact one and can obscure deeper issues within the system.
Examples of a “per-stream” framework do predate Spotify, even within the niche of digital music. The New York Times used the phrase “$.0023 per song downloaded” back in 2002 when covering artist backlash towards MusicNet and PressPlay, both major label backed digital music platforms. It’s not difficult to find stories written throughout the 20th century that break down how little artists make from individual CD or vinyl sales, so the internet didn’t create this perceived compensation gap. Hesmondhalgh’s paper repeatedly acknowledges that it’s hard to find concrete data around artist income, and this blindspot might contribute towards the prominence of concerns with streaming payments.
Another issue Hesmondhalgh raises, which I haven’t seen made in such a cogent manner, was around the value of comparing per-stream rates of various platforms. He astutely observes that such comparisons often flatten how much various musicians make in aggregate from different platforms. There’s little value in Tidal paying out more than Spotify on a per-stream rate, if the former represents a minority share of the overall streams for an artist. The isolated focus on streaming rates obscures that many issues of fair artist compensation are about the relationship between artists and labels, or between record labels and technology companies. While the analysis regarding per-stream rates is an important part of the paper, he also raises concerns over the methodology used in recent coverage of music streaming.
The Bigger Picture
Hesmondhalgh critiques Liz Pelly’s work in The Baffler, Victor Luckerson’s work in The Ringer, and even my work for not providing enough clear evidence that music streaming has in fact decreased the ability for artists to make a living off their music. I’ll only speak for myself as to why it's easy to make such a leap but will also accept that this is a fair and necessary critique.
Daniel Ek’s bold claim that a million artists could live off Spotify stokes the fire of such criticism. This recently resurfaced when Ek’s comments about artists needing to continuously create music again sparked artist backlash. Even if all artists aren’t bound to Spotify’s ecosystem, the company's decisions still cause hold ripple effects across the rest of the industry. The company’s own ambitions are too big to ignore. Thus Spotify, and perhaps even YouTube, is seen as a stand-in not only for the company's deleterious effects on the record industry but also the larger effects post-financial crash: smaller music venues shutting down, rising rents, wage stagnation (especially in the United States), and the hollowing out of music media, both independent and corporate. Neither of those tech firms could shoulder that entire burden, but building on the anti-Napster, tech skeptic lens that is somewhat rooted in the record industry makes that an easier sell. If music’s enemies are always outside forces, it's easier to avoid looking inward.
Now Hesmondhalgh isn’t deferential to streaming platforms, nor does he deny the harms of major labels; he just wants claims that the industry is worse today to have a better historical grounding. He writes in the paper (emphasis mine):
It is certainly valid to criticise the MSS for being dominated by the majors, or to question the musical system dominated by MSS for involving close synergies and complementarities between the big streaming companies and the majors. But such critique would benefit from being clear that there is nothing novel about major dominance, and there is scant evidence that MSS has increased that domination in the musical system as a whole. Moreover, that dominance needs to be weighed against the increasing possibilities for musicians to work independently of the major-dominated recording industry system, and to retain ownership of their own rights.
This is a concern I’ve fumbled towards in my writing throughout 2020. Oftentimes, the analysis of the larger economic forces at play within the record industry, of which streaming is just one part, is lacking. (He even admits this is a large ask of any writer.) That’s why this year I’ve written extensively on the interconnections between private equity firms and the record industry, pension/sovereign wealth funds buying up music catalogs, and the unparalleled reach of Liberty Media and Tencent. Cherie Hu’s graphic of where companies share investments is in many ways the tip of the iceberg when it comes to critiques and scholarship to understand the contemporary record industry. Even though Hesmondhalgh repeatedly makes clear that he’s not implying the current setup is fair or just for all artists, he needs more evidence to know how and why it’s worse.
Hesmondhalgh closes with a look at “user-centric streaming,” the model in which what you pay to a streaming service goes directly to the artists you listen to, rather than a big pot divided out proportionally between all artists. I’ve written and will continue to write about the idea, but I find it an interesting landing point in the paper. He even mentions the possibility of such a change potentially undermining a number of critiques against the big platforms. The spectre of government regulation pushing for user-centric streaming or other reforms is raised, though such changes don’t need to take place to understand the theories promoted by his critiques
This is why I often bristle at calls for streaming services to pay artists more, because the business models of these companies cannot meet such a demand. Even calls to break up and regulate record labels, radio, or streaming platforms still need more thinking, especially when the proliferation of financially backed publishers that buy up song rights is further estranging parts of the record industry from itself. It seems Mat Dryhurst’s concern around “streaming fatalism” preventing new ideas from entering this space still holds true.. Artists, and not just those on the biggest stages, need to have a real say in how these tectonic plates are shifting.
The slightly more existential question for those in the field, myself included, is that if we’re going to talk about what is and isn’t fair for artists we need a better understanding of what artist and who is our audience. Otherwise the issues that are highlighted and become potentially central demands for reform might not speak to the core issues facing musicians. Hesmondhalgh admits such data collection around the experiences of musicians can be hard, even my own journey to articulate the deleterious effects of record industry financialization remains frustratingly vague. Still, it feels like the conversations in these spaces are building upon each other even if there’s still much to learn.
The update for today is an event plug. The Music Workers Alliance, one of the newer American musician advocacy groups to arise this year, is hosting a rally in New York City on October 26th. The group is asking the federal government to extend unemployment and provide relief for people still affected by the ongoing pandemic. Hopefully something, anything gets passed in the coming days.
A Note of Financialization
Last week Big Hit, the management company of the massively successful pop group BTS, went public on the South Korean stock exchange. That the “BTS Army”, a highly organized network of fans, received a little under 500,000 shares from Bang Si-hyuk, one of the company’s founders, speaks at least symbolically of the relationship between the group’s global success and its strong network of unpaid marketers. The New York Times noted that there was high interest in the stock because of the sagging South Korean economy, which only compounds the question of what exactly Big Hit will mean as BTS’s popularity potentially wanes. Certainly will be worth keeping an eye on their own investments, since the financialization of fandom will eventually need to find a new act.
I also wanted to share a few quick updates from the world of financialized song rights holders. L.A. Reid, who left Epic Records back in 2017 after accusations of sexual harassment, sold off much of his catalog to the Hipgnosis Song Fund and is now on its board of advisors. Also, it’s confirmed that Round Hill Music Group intends to go public on the London Stock Exchange with its Royalty Fund I, which started in 2012. Billboard explores the news in pretty great detail, but for clarity’s sake: Royalty Fund I is going public, Royalty Fund II is not going public, and Round Hill is reportedly raising money for the Royalty Fund III. So don’t worry, there are likely going to be many chances to invest in old song catalogs for years to come. And one last bit of news: Warner Music Group raised $250 million in debt to make some major song catalog purchases. Music Business Worldwide hinted that news should drop on these purchases soon, so just refreshing that homepage and clicking those ads.
6 Links 2 Read
I’ve asked for some updated government oversight of the digital music industry for years, so credit to the United Kingdom for taking some baby steps in that direction. The Digital, Culture, Media and Sport Committee is going to be looking into the “Economics of Music Streaming” and one can submit evidence to the investigation here. I’ll defer to folks with better knowledge of the UK government with regard to what may come out of this process, but I appreciate the exploration of systemic changes to digital music business practices.
How the Election Could Shift Music Industry Policy - Billboard (Subscription)
Not so much. There is a rather powerful bipartisan consensus around a number of record industry issues and deeper change likely isn’t Biden’s first or thirty-second priority. Also, such fights might fracture the coalition that passed the Music Modernization Act and is currently rallying behind the National Independent Venue Association demands for government relief.
Are We Reaching Peak Streaming Subscriptions? - Billboard (Subscription) / The US music market isn’t yet at ‘peak streaming subscriptions’ - Music Ally
Will Page, Spotify’s former Chief Economist, suggests in Billboard that there isn’t a reason to hit the panic button with a sudden slow down of paid music subscribers. Though there certainly will be more efforts to turn non-payers into subscribers, this would be an early sign that the 2020s sees a shift towards platforms adopting more considered monetization strategies.
Signing bonuses used to run the ticketing business. What happens now? - Water and Music (Subscription)
A revealing look at a slice of the live music industry. I can’t say that any of the ticketing companies in this piece were doing work that I find interesting, novel, or more abstractly good; still a great primer on how the pandemic is changing up a far under-covered part of the industry.
Shout to this kid.
How Would President Biden Approach Corporate Power? - Matt Stoller
A deep dive into the many paths Joe Biden’s presidency could take with regards to business monopolies. Stoller’s central argument is that unlike the Obama years, he expects Biden to do something with regard to antitrust; the question is just what.